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Units sold 1 0 0 million units Revenue 2 0 0 Variable costs Materials 3 0 Direct labor ( manufacturing , sales ) 4 0

Units sold 100 million units
Revenue 200
Variable costs
Materials 30
Direct labor(manufacturing,sales)40
Opearational costs(manufacturing,inventory,delivery)30
Other variable costs 20
Margin on Sales 80
Fixed Costs
Marketing and advertising 10
Research and development 10
Other fixed costs(e.g head office)40
Net margin 20
QUESTION 1a: What would be the absolute change in net margin if Pepita Disco increased advertising by 10% and as a result had 10% higher sales?
QUESTION 1b: What would be the absolute change in net margin if Pepita Disco increased the price by 10% with an elasticity -1?
QUESTION 1c: What would be the absolute change in net margin if Pepita Disco increased the price by 10% with an elasticity -1.7?
QUESTION 1d: What would be the absolute change in net margin if Pepita Disco lowered the price by 10% with an elasticity -1.7?
QUESTION 1e: What would be the absolute change in net margin if Pepita Disco motivated salespeople to increase unit sales volume by 10% with an elasticity =-1.7?

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