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Suppose that Tommy Bahama's marginal cost of a jacket is $200 and at one of the...

Suppose that Tommy Bahama's marginal cost of a jacket is $200 and at one of the firm’s shops, the total fixed cost is $500 a day. The profit-maximizing number of jackets sold in this shop is 30 a day. Then the shops nearby from other retailers start advertising their jackets. The Tommy Bahama shop decides to spend $1,000 a day advertising its jackets, and its profit-maximizing number of jackets sold jumps to 60 a day. Before advertising: Suppose that the price elasticity of demand is 2. Can you compute the price of a Tommy Bahama jacket? And the markup? Please, compute the amount of maximal profits.

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Answer According to Larners Index - La Pare -- the Assuring Ed 2-2, Me=200 P-200 P-200 - 200 ov, 20. - .:Pax 200 300 Total coLoos ã 8.66h = 03-000- 09700ъ-о 9XESLS, ~ Fox 0 , Р - 233: S S •

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