EXHIBIT 1: PRE-BREXIT INCOME STATEMENT (ANNUALIZED), ASSUMING 1.00=1.36 Assume that fixed costs remain fixed and variable costs vary proportionally to volume or quantity sold. Assume that U.K. purchasers' consumer behavior is somewhat elastic and that market research suggests their elasticity =1.1. Using the simple price elasticity formula (see p.3 of the case), calculate profit in both pounds and euros. Show all your work in the table below. Things to Consider: For (3): What does Price Elasticity =1.1 mean for the new quantity under S2? Would the quantity decrease or increase, and by how much? What would be the \% Change In Quantity Demanded under S2? Contract Labor Cost: Initial Quantity from Exhibit 1= ? Initial Total Contract Labor Cost from Exhibit 1=? Contract Labor Cost Per Unit = ? Assume that fixed costs remain fixed and variable costs vary proportionally to volume or quantity sold. Assume that U.K. purchasers' consumer behavior is somewhat elastic and that market research suggests their elasticity = 0.8. Using the simple price elasticity formula (see p.3 of the case), calculate profit in both pounds and euros. Show all your work in the table below. Things to Consider: For (6): What does Price Elasticity =0.8 mean for the new quantity under S3? Would the quantity decrease or increase, and by how much? What would be the \% Change In Quantity Demanded under S3? Contract Labor Cost: Initial Quantity from Exhibit 1= ? Initial Total Contract Labor Cost from Exhibit 1= ? Contract Labor Cost Per Unit = ? Discussion: EXHIBIT 1: PRE-BREXIT INCOME STATEMENT (ANNUALIZED), ASSUMING 1.00=1.36 Assume that fixed costs remain fixed and variable costs vary proportionally to volume or quantity sold. Assume that U.K. purchasers' consumer behavior is somewhat elastic and that market research suggests their elasticity =1.1. Using the simple price elasticity formula (see p.3 of the case), calculate profit in both pounds and euros. Show all your work in the table below. Things to Consider: For (3): What does Price Elasticity =1.1 mean for the new quantity under S2? Would the quantity decrease or increase, and by how much? What would be the \% Change In Quantity Demanded under S2? Contract Labor Cost: Initial Quantity from Exhibit 1= ? Initial Total Contract Labor Cost from Exhibit 1=? Contract Labor Cost Per Unit = ? Assume that fixed costs remain fixed and variable costs vary proportionally to volume or quantity sold. Assume that U.K. purchasers' consumer behavior is somewhat elastic and that market research suggests their elasticity = 0.8. Using the simple price elasticity formula (see p.3 of the case), calculate profit in both pounds and euros. Show all your work in the table below. Things to Consider: For (6): What does Price Elasticity =0.8 mean for the new quantity under S3? Would the quantity decrease or increase, and by how much? What would be the \% Change In Quantity Demanded under S3? Contract Labor Cost: Initial Quantity from Exhibit 1= ? Initial Total Contract Labor Cost from Exhibit 1= ? Contract Labor Cost Per Unit = ? Discussion