A firm manufactures and sells fresh fruit drinks. The firm sells 200 bottles of fruit drink each week; its weekly total costs are £540, which includes £300 of fixed costs. The drink is sold at £4 a bottle.
A rival firm drops out of the market and sales increase to 250 bottles a week. Other things remaining the same, profit per week increases by
1 )
£65
2 )
£125
£140
4 )
£400
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