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The Blue Company is currently selling its single product for $6. Variable costs are estimated to remain at 70% of the current selling price and
The Blue Company is currently selling its single product for $6. Variable costs are estimated to remain at 70% of the current selling price and fixed costs are estimated to be $3,900 per month. If Blue increases its selling price by 40%, its variable cost ratio will:
Not change.
Decrease.
Increase.
Cannot determine with the information given.
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