A firm is able to sell 25,000 units at $ 10 per piece. The company fixed cost is $50,000. Variable cost is $5 per unit.

a. What is the contribution per unit?

b. What is the breakeven sales in $? What is the breakeven sale in units?

c. What is the markup on sales price? What is the mark up on total cost?

They raise the price to $15 and demand drops to 15000.

d. Calculate the price elasticity.

e. What is the new markup (profit margin %) on the sales price ($15)?

f. What is the new mark up (profit margin %) on total cost?

g. Please calculate the total profit for this company as well as the profit per each toy sold.

h. Are they better off raising the price?