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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.

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Profits represent what the company has a result of the difference between the turnover or total sales and the overall costs it incurs. Given the stepped up unit price, there will be a boost in turnover accordingly. If the total costs remain the same or grow below the level of increase in revenues, then profits will be higher. If the increase rate of turnover is less than the increase rate of total costs for a reason or another, then the company will experience a cut in profits.  
ayfat23

With the sudden increase in Demand for the bike, and increment in price from $50 to $60, then the profit will increase.

  • An economic profit can be regarded as  difference that exists between the revenue that is been gotten by a firm from its outputs as well as  the opportunity costs of its inputs.

  • As people are demanding for the bike, then the firm will make more sales which will leads to more profit, even the rise in price is at the favour of the firm because they make additional $10 on each bike.

Therefore, so far the turnover doesn't change, then the firm will be making good profit.

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https://brainly.com/question/2733525?referrer=searchResults

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