Vanessa Pareja has just become a product manager for Brand X as a toy manufacturer. Brand X is a product with a retail price of $1.00. Retail Margins on the product are $0.35 while wholesalers take a 12% margin. Brand X and its direct competitors sell a total of 20 million units annually. Brand X has 24% of this market. Variable manufacturing costs for Brand X are $0.09 per unit. Fixed manufacturing costs are $900,000. The advertising budget for Brand X is $500,000. The brand X product manager's salary and expenses total $35,000. Salespeople are paid entirely by a 10% commission (out of manufacturer price to wholesaler). Shipping costs, breakage, insurance, and so forth are $0.02 per unit.

The industry demand is expected to increase to 23 million units next year. Ms. Pareja is considering raising her advertising budget to $1 million. Use this information to answer Question 2.

2a. If the advertising budget is raised, how many units will Brand X have to sell to break even?

2b. How many units will Brand X have to sell in order to achieve the same profit that it did this year?

2c. What will be Brand X's market share have to be next year for the same target profit as this year?