Joey goes to woot.com and buys a "Bag of Random Crap" for $3.00 that contains a swimmer's noseplug, a graphic novel, a tomagachi and a subwoofer. If the average cost per item to woot is .08 what is their profit margin on Joey's crap?
RANDOM
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I have a problem with this answer. Normally economists would define profit margin as profit divided by price. Therefore a profit margin of 100% could never be exceeded as the cost is zero and your profit equals your price. The only other possible formula to make sense would be profit divided by cost which would be (2.68/.32) = 837%, rather than 937%. Thus none of your answers are correct - it should be 89.3% (2.68/3.00).
posted January 25, 2010 12:38pm