Erreix asked in Social ScienceEconomics · 1 month ago

I'm currently trying to answer this problem in the book. The given answer is $51.9/ton.?

Paper pulp is sold on the basis that it contains 12 percent moisture; if the moisture exceeds this value, the purchaser can deduct any charges for the excess moisture and also deduct for the freight costs of the excess moisture. A shipment of pulp became wet and was received with a moisture content of 22 percent. If the original price for the pulp was $40/ton of air dry pulp and if the freight is $1.00/100 lb shipped, what price should be paid per ton of pulp delivered?

I first converted the freight price ($1.00/100lb) into $/tons

= $22/ton

Since the excess moisture is the basis for deduction in charges, I took the difference:

22-12=%10

Afterwards, I multiplied the price for the pulp and freight to 0.10 and subtracted them to their original  prices. Lastly, I added the two to get the price.

price paid per ton of pulp = [40 - (0.10 x 40)] + [22 - (0.10 x 22)] = $55.8/ton

But it seems my understanding is wrong, can you tell what am I missing or misinterpreted in the problem?

Update:

Thanks, Oiy. I got how it works now.

1 Answer

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  • Oiy
    Lv 6
    1 month ago

    So the original price per ton is $62 or $ 5.167 per 1% moisture. If the moisture is 22% on delivery day, the original is just for 10% moisture. So it should be $51.7/ton.

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