The sale price of the unique product is $30, contribution margin ratio 70% and the fixed...
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The sale price of the unique product is $30, contribution margin ratio 70% and the fixed expenses of the business are $300.000. Expecting $210.300 profit in the next period, made a new market research for profit planning and obtained the following results: a) A 10% decrease in the unit sale price will cause a 20% increase in the sales quantity, b) A 15% decrease in the unit sale price will cause a 30% increase in the sales quantity, c) A 20% decrease in the unit sale price will cause a 40% increase in the sales quantity. As a manager of the business make your decision, is there a need to make a change in the sale price, if "Yes" choose the most appropriate option. The sale price of the unique product is $30, contribution margin ratio 70% and the fixed expenses of the business are $300.000. Expecting $210.300 profit in the next period, made a new market research for profit planning and obtained the following results: a) A 10% decrease in the unit sale price will cause a 20% increase in the sales quantity, b) A 15% decrease in the unit sale price will cause a 30% increase in the sales quantity, c) A 20% decrease in the unit sale price will cause a 40% increase in the sales quantity. As a manager of the business make your decision, is there a need to make a change in the sale price, if "Yes" choose the most appropriate option.
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