Answer the following questions using the information below:
Schwimmer Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 6,000 units.

-Would you recommend the 50-cent price increase?
A)No, because demand decreased.
B)No, because the selling price increases.
C)Yes, because contribution margin per unit increases.
D)Yes, because operating profits increase.

Question

Answer the following questions using the information below:
Schwimmer Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 6,000 units.
 
-Would you recommend the 50-cent price increase?
A)No, because demand decreased. 
B)No, because the selling price increases. 
C)Yes, because contribution margin per unit increases. 
D)Yes, because operating profits increase.

Quizplus · Accepted Answer

The Answer of Answer the following questions using the information below:
Schwimmer Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 6,000 units.
 
-Would you recommend the 50-cent price increase?
A)No, because demand decreased. 
B)No, because the selling price increases. 
C)Yes, because contribution margin per unit increases. 
D)Yes, because operating profits increase.

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