solve question 2

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QUESTION 2 With reference to Acme Kitchen Products in Question 1, assume price and demand are unrelated. The company sells the toasters for $80 each if they spend $8,000 per month on advertising (C). C, and c remain as indicated in Question 1. The maximum production capacity is 5,000 toasters per month. a) What is the demand breakeven point? b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in the variable costs? Explain your answer. Acme Kitchen Products manufactures and sells toasters in a market where price (p) and demand (D) are related as follows: p = $45 0.02D The fixed cost (C) is $900 per month and the variable cost per toasters (c) is $15. QUESTION 2 (60 points) With reference to Acme Kitchen Products in Question 1, assume price and demand are unrelated. The company sells the toasters for $80 each if they spend $8,000 per month on advertising (C). C, and c remain as indicated in Question 1. The maximum production capacity is 5,000 toasters per month. a) What is the demand breakeven point? b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in the variable costs? Explain your answer. QUESTION 1 (40 points) Acme Kitchen Products manufactures and sells toasters in a market where price (p) and demand (D) are related as follows: p = $45 -0.02D The fixed cost (C) is $900 per month and the variable cost per toasters (c) is $15. QUESTION 2 With reference to Acme Kitchen Products in Question 1, assume price and demand are unrelated. The company sells the toasters for $80 each if they spend $8,000 per month on advertising (C). C, and c remain as indicated in Question 1. The maximum production capacity is 5,000 toasters per month. a) What is the demand breakeven point? b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in the variable costs? Explain your answer. Acme Kitchen Products manufactures and sells toasters in a market where price (p) and demand (D) are related as follows: p = $45 0.02D The fixed cost (C) is $900 per month and the variable cost per toasters (c) is $15. QUESTION 2 (60 points) With reference to Acme Kitchen Products in Question 1, assume price and demand are unrelated. The company sells the toasters for $80 each if they spend $8,000 per month on advertising (C). C, and c remain as indicated in Question 1. The maximum production capacity is 5,000 toasters per month. a) What is the demand breakeven point? b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in the variable costs? Explain your answer. QUESTION 1 (40 points) Acme Kitchen Products manufactures and sells toasters in a market where price (p) and demand (D) are related as follows: p = $45 -0.02D The fixed cost (C) is $900 per month and the variable cost per toasters (c) is $15