6. if you have a tennis shoe on the market that is a little better than the competitions shoe and they sell…
6. if you have a tennis shoe on the market that is a little better than the competitions shoe and they sell theirs at $50 a pair, what would be the price for which you would set your brand of tennis shoe? (simple math symbols folks).\na. = $50\nb. < $50\nc. > $50\nd. anything for which you want to sell it.\n7. if you sell your brand of shoes for $60 a pair, and your cost of goods per pair is $15, then what is the profit margin?\na. 10%\nb. 20%\nc. 25%\nd. none of these
Answer
Explanation:
Step1: Analyze question 6
Since the product is better than competitors', a higher price can be set.
Step2: Analyze question 7
Profit margin formula is $\frac{\text{Selling Price}-\text{Cost of Goods}}{\text{Selling Price}}\times100%$. Given selling price = $60$ and cost of goods = $15$.
Step3: Calculate profit margin
$\frac{60 - 15}{60}\times100%=\frac{45}{60}\times100% = 75%$.
Answer:
- c. > $50
- d. None of these