Demand at various prices, The TOTOM Company sells one product with a variable cost of $5, Accounting Basics

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Demand at various prices

The TOTOM Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand. If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged in order to maximize profits?

Units Sold Price
30,000 $10
40,000 $9
50,000 $8
60,000 $7

a. $10
b. $9
c. $7
d. $8

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Accounting Basics: Demand at various prices

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