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Sales are low because of a recession. Your current financial results are as follows: Sales volume: 100 Revenue: $10,000 Variable costs: $4,000 Contribution margin: $6,000
Sales are low because of a recession. Your current financial results are as follows: Sales volume: 100 Revenue: $10,000 Variable costs: $4,000 Contribution margin: $6,000 Fixed costs: $3,000 Profit (loss): $3,000 If you reduce the price by 10%, sales volume in units will increase by 30%. Question: Should you reduce the price? O Yes, and the profit will increase by $600. O No, and the profit will decrease by $600. Yes, and the profit will increase by $1,800. O No, and the profit will decrease by $1,800
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