Question
The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets
The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The postal service purchases the souvenir sheets from a supplier for $0.80 each. St. Vincent has been selling the souvenir sheets for $8.00 each and ordinarilly sells about 80,000 units.
To test the market, the postal service recently priced a new souvenir sheet at $7.00 and sales increased to 94,400 units. The treaceable fixed expenses are $ 350,000 per year.
How many units would they have to sell at the lower price of $7.00 to earn the same profit?
A) 90,000
B) 81,289
C) 92,904
D) 94,400
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