Wendy retails motor homes, which she buys for a sum that does not vary with the number she purchases from the manufacturer.She can sell eleven per week at $40,000.If she limits sales to ten, she can charge $41,000 each.She will sell eleven per week if the cost of each vehicle is no more than
A)$20,000.
B)$30,000.
C)$40,000.
D)$41,000.

Question

Quizplus · Accepted Answer

If Wendy sells 11 motorhomes per week at $40,000 each, her weekly revenue is:

11 x $40,000 = $440,000

If Wendy sells 10 motorhomes per week at $41,000 each, her weekly revenue is:

10 x $41,000 = $410,000

Since her cost does not vary with the number she buys, her profit is higher when she sells at the higher price, as long as she still sells 10 or more per week.

To find out the maximum cost per motorhome that would allow her to sell 11 at $40,000 each, we can set up an equation:

11 x $40,000 = 10 x $41,000 + 1 x cost

Solving for the cost, we get:

$440,000 = $410,000 + cost

cost = $30,000

Therefore, Wendy can sell 11 motorhomes per week at $40,000 each and still make a profit as long as her cost per motorhome is no more than $30,000.

Wendy Retails Motor Homes, Which She Buys for a Sum