Ted's Sleds produces sleds at an average variable cost per unitof $41.18 when production quantity...

Ted's Sleds produces sleds at an average variable cost per unit of $41.18 when production quantity is 1,250 units. When production increases to 1,251 units the average variable cost declines to $41.16. What is the minimal price that Ted's Sleds can charge for the 1,251st sled without affecting net profits?

a. $15.16

b. $14.16

c. $14.37

d. $16.16

e. $13.89

Expert Solution

Minimal price for 1251 units = total cost for 1251 units - total cost for 1250 units

Total cost = Avg cost * no of units

Minimal price for 1251 units = (41.16 * 1251) - (41.18 *1250)

= 51491.16 - 51475

= 16.16

Option D has to be selected.

jeff jeffy answered 2 years ago

Ted's Sleds produces sleds at an average variable cost per unit of $41.18 when production quantity...

Ted's Sleds produces sleds at an average variable cost per unit of $41.18 when production quantity is 1,250 units. When production increases to 1,251 units the average variable cost declines to $41.16. What is the minimal price that Ted's Sleds can charge for the 1,251st sled without affecting net profits?

Ted's Sleds produces sleds at an average variable cost per unit of $41.18 when production quantity...

Ted's Sleds produces sleds at an average variable cost per unit of $41.18 when production quantity is 1,250 units. When production increases to 1,251 units the average variable cost declines to $41.16. What is the minimal price that Ted's Sleds can charge for the 1,251st sled without affecting net profits? Select one: a. $15.16 b. $14.16 c. $13.89 d. $14.37 e. $16.16

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Ted's Sleds produces sleds at an average variable cost per unitof $41.18 when production quantity...

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