E8-4 The editor of Spunk Magazine is considering three alternative prices for

E8-4 The editor of Spunk Magazine is considering three
alternative prices for

Managerial Accounting 2nd Ed

EXCERCISE 8-4 The editor of Spunk Magazine is considering
three alternative prices for her new monthly periodical. Her estimate of price
and quantity demanded are:

Price
Quantity Demanded

$6.95
20,000

$5.95 25,000

$4.95
32,000

Monthly costs of producing and delivering the magazine
include $80,000 of fixed costs and variable cost of $1.50 per issue.

Which price will yield the largest monthly profit?