MGMT 32400-The Michael Scott Paper Company sells 100,000

by | Mar 18, 2020 | Uncategorized

  

The Michael Scott Paper Company sells 100,000 units at $7 per unit each year to break even. Unit Variable Cost is $4. •Due to competition, Michael is considering a $1 price cut (i.e., $6 instead of $7) and publicize this information with an advertisement which costs $8,000

(1) How many more units sales are required to break even?

(2) Suppose the advertisement will increase the demand (unit sales) by 30%, will the company be able to break even?

(3) If not, what is the lowest price to set?

  

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