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netineya
4 months ago
9

Demand for bikes has suddenly increased and the market price has risen from 50 to 60.In three to five sentences explain how this

change will affect profits?
History
2 answers:
Alex [1.6K]4 months ago
6 0

Answer:

An increase in the market price per bike from $50 to $60 incentivizes the company to produce more bikes, as the marginal revenue rises. Previously, profit maximization occurred at six bikes, but now it likely shifts to a higher production level, such as seven bikes.

Explanation:

9966 [1.7K]4 months ago
4 0
Since demand has increased, the profit from each bike is expected to rise as well. However, overproduction might lead to an excess supply of bikes, causing their market value to decline eventually.
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