A company XYZ sells 10,000 of its products a year at $100 per unit. The price elasticity

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A company XYZ sells 10,000 of its products a year at $100 per unit. The price elasticity at the price is −1. Suppose its variable cost is $70 per unit. Which one of the following is true?

1. The company can increase profit by decreasing the price by 10%

2. The company can increase profit by increasing the price by 10%

3. Since the elasticity is -1, the profit is maximized at this price point

4. None of the answers are correct

Related Book For answer-question

Management and Cost Accounting

ISBN: 978-1408093887

8th edition

Authors: Colin Drury

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Posted Date: Jan 22, 2024 10:32 AM

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A company XYZ sells 10,000 of its products a year at $100 per unit. The price elasticity

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The detailed answer for the above question is provided below To determine which statement is true lets analyze the options 1 The company can increase ... View the full answer

Management and Cost Accounting

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