Javier is the business manager at his college. In his role, Javier makes a lot of business decisions. Javier has installed a vending machine in a dorm for soft drinks. The machine rents for $200 a month and the electrical use is minimal. Javier buys soft drinks for $.25 each and charges $.75 each from the vending machine. Currently, the machine has a sales volume of 400 cans a month. Javier thinks raising the price to $.80 will not have any effect on sales. What impact would raising the price to $.80 have on overall profit or loss?
A) Profit of $20
B) Profit of $320
C) Profit of $100
D) Profit of $200

Question

Quizplus · Accepted Answer

Raising the price to $0.80 from $0.75 increases the profit per can from $0.50 to $0.55. With a sales volume of 400 cans, the additional profit is 400 cans * $0.05 = $20.

Javier Is the Business Manager at His College