Testor Paints Sells Varnish with a Variable Cost of $6

question 20

Multiple Choice

Testor Paints sells varnish with a variable cost of $6.50 per gallon. The company is unsure which price to charge in order to maximize profits. The price charged will also affect the demand. $$\begin{array} { c c } \text { Gallons Demanded } & \text { Unit Price Per Gallon } \\20,000 & \$ 11 \\30,000 & \$ 10 \\40,000 & \$ 9 \\50,000 & \$ 8\end{array}$$ If fixed costs are $80,000 and the chart above represents the demand at various prices, what price should be charged in order to maximize profits?

• A) $11
• B) $10
• C) $9
• D) $8

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Definitions:

NC Pushbutton

A Normally Closed pushbutton switch that makes contact (closes) when at rest and breaks the circuit when pressed.

Ladder Logic

A programming language that represents electronic switching circuits; widely used in programming PLCs.

Control Process

A method or procedure in automation or management used to direct, monitor, and regulate the behavior and operations of a system to achieve desired results.

Limit Switch

An electromechanical device used to detect the presence or absence of an object when it reaches a designated point.