Question

: You have a product that sells for $100, and costs you $60 to make. A customer normally orders 1,000 units, but will order 2,000 if you drop the price 20%. Would you make more or less on the larger order?

Answer 1

The profit would be the same on the larger order of 2,000 units as it would be on the normal order of 1,000 units.

Step-by-step explanation:

To determine whether you would make more or less on the larger order of 2,000 units, we need to calculate the profit for each scenario.

For the normal order of 1,000 units, the profit per unit would be $100 (selling price) - $60 (cost to make) = $40.

So the total profit would be 1,000 units x $40 = $40,000.

For the larger order of 2,000 units, we can calculate the new price after the 20% discount by multiplying $100 by (1 - 0.20) = $80.

The profit per unit would now be $80 - $60 = $20. So the total profit would be 2,000 units x $20 = $40,000.

Therefore, you would make the same amount of profit on the larger order as you would on the normal order.