Question: Total fixed costs are s 15,000. Unit variable oost is $20. At current selling price of $50, you sell 1,000 units per month. If you

Total fixed costs are s 15,000. Unit variable oost is $20.

Total fixed costs are s 15,000. Unit variable oost is $20. At current selling price of $50, you sell 1,000 units per month. If you reduce the price by 10%, sale volume will increase to 1,200 units. Compute profit at the original price: Compute profit at the reduced price: Should you reduce the price? ed costs ar O YES, because revenue will increase by $8,500 NO, because a lower price always reduces profit O YES, because profit will increase by S2,500

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