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a. Suppose the Acme Company decides to use markup pricing to price its products. It has calculated its fixed costs to be $225,000. The variable cost per unit is $25. It expects to sell 80,000 units. The desired markup is 50%. What is the unit sales price?

b. Suppose Acme changes their mind and decides a 50% markup is too high. They decide that they want to earn a profit of $200,000. What should their per-unit sales price be?

c. Suppose the Ajax Company plans to sell its new electric car through its dealerships at a retail price of $5,000. Ajax has total fixed costs of $1.5 million. Variable costs for each vehicle produced equal $3,500. What is the break-even point in units?

d. What is the break-even point in sales dollars for the Ajax Company?

e. What do you think are a marketers challenges with setting a price?