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Spacely Sprockets is determining their sales and manufacturing forecast for the second quarter of 2023. They plan to raise prices. The current price for sprockets
Spacely Sprockets is determining their sales and manufacturing forecast for the second quarter of 2023. They plan to raise prices. The current price for sprockets is $20.00. Their total unit cost is $10.00. Current quarterly sales are 12,000 units. In the past sprocket sales have decreased 570 units for each 5% increase in price. Spacely plans to increase the price to $22.00. Based on this information, how much revenue would Spacely generate next quarter if they do not increase the price? How much revenue would Spacely generate next quarter if they do increase the price? If you were Spacely, and your pricing objective was increased revenue and market share, would you implement the price increase - Yes or No? If you were Spacely and your pricing objective was increased profit per unit, would you implement the price increase - Yes or No
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