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Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 components per year. A foreign car manufacturer has approached Impala with an

Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 components per year. A foreign car manufacturer has approached Impala with an offer to purchase 120,000 components. Impalas results for last year are as follows:

Per Unit

Selling price

$9.00

Variable costs

$3.00

Fixed costs

$2.50

If Impalas current demand from regular customers is 900,000 units. What is the minimum price per unit Impala needs to accept the offer?

$5.50

$4.00

$6.00

$8.00

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