Near the City Park, Wendi Haskell Opened a Bicycle Shop

question 43

Short Answer

Near the city park, Wendi Haskell opened a bicycle shop where she rents and sells both mountain and road racing bikes. Wendi buys her rental mountain bikes from a local manufacturer whose cost is $180 for each bike. If Wendi pays $315 for each bike, what is the manufacturer's markup percent based on its cost?

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Definitions:

Utility Function

An economic model or formula that reflects the preference, satisfaction, or happiness a consumer obtains from consuming goods and services.

French Fries

A popular food item made by cutting potatoes into strips and deep-frying them until crispy.

Utility Function

A mathematical representation that relates the total utility an individual derives from consuming different bundles of goods and services.

Indifference Curves

A graphical representation showing combinations of goods that provide equal satisfaction and utility to a consumer.