MrPorter Sells 10 Bottles of Champagne Per Week at a Price

question 12

Essay

Mr.Porter sells 10 bottles of champagne per week at a price of $50 per bottle.He can sell 11 bottles per week if he lowers the price to $45 per bottle.The quantity and the price effects on total revenue would be, respectively:
A.an increase of $450 and a decrease of $500.
B.an increase of $495 and a decrease of $550.
C.an increase of $45 and a decrease of $5.
D.an increase of $45 and a decrease of $50.

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Definitions:

Desired Profit

The target profit a company aims to achieve within a specific period.

Budget Standard Cost

Expected cost of goods or services set during a budgeting process, which serves as a guideline for managing and controlling future costs.

Markup Percentage

A ratio that shows how much a product’s selling price exceeds its cost, expressed as a percentage of the cost.