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A company makes a product and has no way to determine which ones are faulty until an unhappy customer returns it. Three percent of the products are faulty and will cost the company $200 each in customer service and repairs. If the company does not refund the customer when repairing the item, how much should the company charge to make a profit of $2. 00 per item? $6. 00 $6. 19 $8. 00 $8. 25.

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Price is the amount charged by the company for its goods or services. The price to be charged by the company to earn a profit of $2 is $8.

What is Price?

Price refers to the quantity of money charged for a product or service. Simply, price is the value of a good or service. It s an important element of the marketing mix.

The given question states that three percent of the product of the company are faulty and costs the company $200. The company desires to make a profit of $2 per product.

Let x be the price per product.

The price to be charged for each product can be determined as:

[tex]\begin{aligned} \rm Profit \:per\:product &=\rm Price\:per\:product - Cost\:due\:to\:faulty\:product\\\\\$2 &= x - (0.03 \times $200)\\\\\$2 &= x - \$6\\\\x &= \$2 +\$6\\\\x &= \$8\end[/tex]

Therefore the price to be charged is $8.

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