(a) The new PlayBox gaming consoles retail for $900 each. However, a shortage ofconsoles caused by manufacturing delays and parts supply issues have lead toscalpers purchasing large numbers of consoles and reselling them for a profit.Due to a manufacturing fault, the scalper incurs a 50% loss on six consoles.i) If the scalper normally makes a 40% profit on the consoles, how manyconsoles must they sell to make up for their loss?ii) The scalper is impatient and decides to increase their price to make up forthe loss faster. What price must they resell the consoles at to make backtheir loss upon the sale of their fourth console at the increased price?

Profit is the excess income earned by the producer which is left after paying off all the expenses…

Answered: (a) The new PlayBox gaming consoles…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 2.5CE

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