Question

Bill sells his bananas for $2.00 a bunch, but his costs are only $1.50 a bunch. How much will he have to change his markup to match a competitor’s price of $1.80 a bunch?

Answer 1

To match the competitor's price of $1.80 per bunch, Bill will need to adjust his markup accordingly. Currently, he sells his bananas for $2.00 per bunch, with costs of $1.50 per bunch. This means his current markup is $0.50 per bunch. To determine the new markup, we can set up an equation using the competitor's price and the new cost. Since the competitor's price is $1.80 and the new cost is $1.50, the new markup would be $0.30 per bunch.

Step-by-step explanation:

To match the competitor's price of $1.80 per bunch, Bill will need to adjust his markup accordingly. Currently, he sells his bananas for $2.00 per bunch, with costs of $1.50 per bunch. This means his current markup is $0.50 per bunch ($2.00 - $1.50).

To determine the new markup, we can set up an equation using the competitor's price and the new cost:

New markup = Competitor's price - New cost

Since the competitor's price is $1.80 and the new cost is $1.50, the new markup would be $0.30 per bunch.

Answer 2

Bill needs to reduce his markup by $0.20 per bunch of bananas to match the competitor's selling price of $1.80.

Step-by-step explanation:

The student is asking about how much Bill must change his markup on bananas to match a competitor's lower price. Bill currently sells his bananas for $2.00 a bunch and has costs of $1.50 per bunch, which means he has a markup of $0.50 per bunch. To match the competitor's price of $1.80 a bunch, Bill will need to decrease his markup by $0.20 (from $0.50 to $0.30), resulting in a selling price that matches the competitor's.