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Cycling Masters manufactures and sells 8 different models of bicycles. Cycling Masters is contemplating a 6% price cut across all 8 models. It expects the

Cycling Masters manufactures and sells 8 different models of bicycles. Cycling Masters is contemplating a 6% price cut across all 8 models. It expects the price cut to result in an 8% increase in the number of units sold for models Y2501, Y2503, Y2505, and Y2507. The other four models (Y2502, Y2504, Y2506, and Y2508) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Cycling Masters’ profits.

Model

Sales Price

Variable Costs

Sales Volume

Y2501

$80

$40

2,000

Y2502

$90

$45

2,500

Y2503

$100

$50

3,000

Y2504

$110

$55

3,500

Y2505

$120

$60

4,000

Y2506

$130

$65

4,500

Y2507

$140

$70

5,000

Y2508

$150

$75

5,500

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