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Johnson currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. Gorfin is considering

Johnson currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. Gorfin is considering increasing the price of its units to $60 per unit. This will not affect fixed costs, but demand is expected to drop 20%.

(True/False) If Johnson increases the price of its product, then profit will increase $150,000.

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