Highlander Corporation currently sells 40,000 units each month for a selling price of $14 each. Highlander has variable costs of $10 per unit, and total fixed costs of $128,000. Highlander is considering increasing the price of its units to $16 per unit. This will not affect costs, but demand is expected to drop 10%. Should Highlander increase the price of its product?

Highlander Corporation currently sells 40,000 units each month for a selling price of $14 each. Highlander has variable costs of $10 per unit, and total fixed costs of $128,000. Highlander is considering increasing the price of its units to $16 per unit. This will not affect costs, but demand is expected to drop 10%. Should Highlander increase the price of its product? Multiple Choice Yes, profit will increase $56,000. O Yes, profit will increase $32,000. No, profit will decrease $32,000 O O No, profit will decrease $56,000