Testor Paints Sells Varnish with a Variable Cost of $6

question 87

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. $$\begin{array} { c c } \text { Gallons Dem anded } & \text { Unit Price Per Gallon } \\20,000 & \$ 11 \\30,000 & \$ 10 \\40,000 & \$ 9 \\50,000 & \$ 8\end{array}$$ 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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