Product Pricing: Single Product Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $12,000,000, of which $4,500,000 is for administrative and selling efforts. Sales are anticipated to be 800,000 cases a year. Variable costs for processing are $30 per case, and variable selling expenses are 25 percent of selling price. There are no variable administrative expenses. If the company desires a profit of $7,500,000, what is the selling price per case? Round answer to two decimal places.
$ 0 price per case

$72.50

Explanation:

Let the selling price per case be represented by x.

Based on the information you can in the question, we will have an equation as:

(80000 × x) = 12,000,000 + 7,500,000 + (800,000 × 30) + (0.25 × 800000x

800000x = 12,000,000 + 7,500,000

+ (800,000 × 30) + (0.25 × 800000x)

800000x = 43500000 + 200000x

Collect like terms

800000x - 200000x = 43,500,000

600,000x = 43500000

x = 43,500,000 / 600,000

x = 72.50

Selling price per case is $72.50

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.