The Demand and Cost Equations for a Stethoscope Are Given $p = 134 - 0.0002 x$

question 53

Multiple Choice

The demand and cost equations for a stethoscope are given by $p = 134 - 0.0002 x$
and
$C = 50 x + 160,000$ where $p$ is the unit price (in dollars) , $C$ is the total cost (in dollars) , and $x$ is the number of units. The total profit $P$ (in dollars) obtained by producing and selling $x$ units is given by $P = R - C = x p - C.$ Determine a price $p$ that would yield a profit of $6.9 million.

• A)$36.62
• B)$48.83
• C)$97.65
• D)$109.86
• E)$73.24

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Definitions:

Common Stock Optionwarrants

Equity derivatives that give the holder the right to purchase common stock at a specified price within a certain time period.

Unrealized Increase

The potential gain in the value of an investment that has not yet been sold and thus not yet converted into actual profit.

Donated Capital

Assets and resources given to a company without the expectation of return or compensation, often used to fund operations or expand business activities.

Contra Account

An account used in a general ledger to reduce the value of a related account when the two are netted together.