Product X is selling for $40 unit Its variable costs are $20 unit Fixed costs associated with this product are $300,000 year The company expects to sell 250,000 of Product X a year What is the current annual profit of Product X What is the breakeven point in units for Product X Suppose the company decides it wants to charge a 20 markup on cost What would the target return price of Product X be The company decides not to change the price of Product X to the price calculated in 3 and keeps the $40 unit But in response to competition, the price of Product X drops to $36 and the company sells 260,000 units that year Calculate the price elasticity of demand based on the original price and data and the latest price and data

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Question: Product X is selling for $40/unit. Its variable costs are $20/unit. Fixed costs associated with this product are $300,000/year. The company expects to sell 250,000

Product X is selling for $40/unit. Its variable costs are $20/unit. Fixed costs associated with this product are $300,000/year. The company expects to sell 250,000 of Product X a year.

What is the current annual profit of Product X?
What is the breakeven point in units for Product X?
Suppose the company decides it wants to charge a 20% markup on cost. What would the target return price of Product X be?
The company decides not to change the price of Product X to the price calculated in #3 and keeps the $40/unit. But in response to competition, the price of Product X drops to $36 and the company sells 260,000 units that year. Calculate the price elasticity of demand based on the original price and data and the latest price and data.

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