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5. Suppose that instead of being designed to increase total sales volume, the new $150,000 advertising campaign will focus on getting customers who would have

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5. Suppose that instead of being designed to increase total sales volume, the new $150,000 advertising campaign will focus on getting customers who would have purchased the Office Basic model to buy the Office Deluxe model instead. To justify the cost of the new advertising, how many customers must purchase the Deluxe model instead of the Basic model? Assume that the new advertising campaign will have no impact on sales of the Home Brewer model. (hint: point of indifference) (4 marks) 6. The company is considering adding a new product to its line of brewers targeted at the office-use market. The new brewer, the Office Plus, would sell for $250 per unit and would have variable tmit costs of $160. Introducing the new model would increase fixed costs by $108,000 annually. How many would you have to sell of the new model to offset the additional fixed costs? (2 marks)

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