Problem #1 Company DML sells brand K. The sales are 50,000 units. The VC per unit = $12, and the CM = 0.4 The total market where the company operates is 500,000 units. That means that currently the company has a market share of MS= (our sales)/(total market sales) = 50,000/500,000 = 10%. The price demand elasticity of the market E = - 5.0 To break even, the company needs to achieve a market share of 8%.

Question #1: What is the companys profit?

Question #2: What is the companys fixed cost?

Question #3 The company is planning to reduce the price by 10%. What will be the companys profit? What will be the BEP in units and in dollars?