Question

Brett wants to sell throw blankets for the holiday season at a local flea market. Brett purchases the throws for $15 and sells them to his customers for $35. The rental space is fixed fee of $1,500 for the season. Assume there is no leftover value for unsold units. If he orders 200 and demand is 150, what is the payoff

Answer 1

Answer:

$750

Explanation:

Total cost for Brett = Rental cost + Buying cost for 200 throws

Total cost for Brett = $1,500 + ($15*200)

Total cost for Brett = $1,500 + $3,000

Total cost for Brett = $4,500

Total income for Brett = Demand * Selling cost

Total income for Brett = 150 * $35

Total income for Brett  = $5,250

Payoff = Income - Cost

Payoff = $5,250 - $4,500

Payoff = $750