Question: Another alternative, assuming the Fx rate changes to 0 . 8 4 0 / $ , is to increase the local price ( pass through
Another alternative, assuming the Fx rate changes to $ is to increase the local price pass through such that perunit contribution remains $ The marketing manager knows that there is some degree of price sensitivity in the market and raising prices will lead to a drop in volume. Based on an analysis of historical records, the marketing manager develops a bestcase low price sensitivity and worstcase high price sensitivity demand schedule:Low price sensitivity: Demand units units times new price starting priceHigh price sensitivity: Demand units units times new price starting priceIf the marketing manager decides to maintain the $ perunit contribution, what will be the new price in euros? How many units will be sold, and what is the resulting total contribution for the a low and b high price sensitivity scenarios?PassThrough ScenarioSales VolumeTotal Contributiona Low Price Sensitivity units$b High Price Sensitivity units$
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