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Can they also help me answer: Industry demand is expected to increase to 9 0 0 , 0 0 0 units next year. Schmidt is
Can they also help me answer: Industry demand is expected to increase to units next year. Schmidt is considering
raising his advertising budget to million.
a If the advertising budget is raised, how many units must Hohner sell to break even?
b How many units must Hohner sell to achieve the same profit in terms of Euro amount
next year as it earned this year?
c What must Hohners market share be next year for its profit in terms of Euro amount to
be the same as this year?
After some reflection, Schmidt decided not to increase Hohners advertising budget. With
industry demand expected to increase to units next year, Schmidt thought he would
give retailers an incentive to promote the Marine Band by raising their margins from to
The margin increase would be accomplished by lowering the manufacturers price of the
product to retailers. Distributor margins would remain at
a If retailer margins are raised to next year, how many Marine Bands must Hohner sell
to break even?
b How many units must Hohner sell to achieve the same profit in terms of Euro amount
next year as it earned this year?
c What must Hohners market share be for its profit in terms of Euro amount to remain at
this years level?
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