Question 7 (14 points). A manufacturer is deciding whether or not to distribute one of his products in a region of the country where this product has not been sold before. (a) This expansion of distribution would require renovation of a warehouse in the new region that would involve fixed costs of $40,000. If the product's variable costs per unit were $3.00 and the manufacturer is planning to sell the product for $5.00 per unit, how many units would the manufacturer have to sell in this new region to break even? Show your work. d (b) The manufacturer's research on the new region has indicated that he would sell 25,000 units of this product at a price of $4.00 per unit and that the price elasticity of demand for this product equals -2. However, the manufacturer is not willing to risk the expansion unless he could increase the product's price to $5.00 (a 25 percent increase over $4.00). Calculate the product's sales level (in units) in the new region that the manufacturer should expect at the price of $5.00. Show your work. (c) Assuming the expected level of sales that you calculated in Part (b) and your answer to Part (a), should the manufacturer go ahead with this expansion of distribution? Justify your answer. (d) Because knowing the price elasticity is crucial to the manufacturer's decision, he decides to use marketing research to determine what the price elasticity of demand would actually be in this situation. Describe the difference between primary and secondary data. Then, for each of these two types of data, describe a research procedure that could be used to estimate the price elasticity in this situation