Brady Inc. produced and sold 200,000 units for $50 each last year. For the upcoming year, management believes that if they decrease the price of each unit by 5%, volume will increase 5%. What are Brady's expected sales revenues for the upcoming year?
A) $ 9,450,000
B) $10,000,000
C) $10,500,000
D) $ 9,975,000

Question

Quizplus · Accepted Answer

The price per unit will decrease by 5% from $50 to $47.50 ($50 - 5% of $50), and the volume will increase by 5% from 200,000 units to 210,000 units (200,000 + 5% of 200,000). The expected sales revenue is 210,000 units * $47.50 = $9,975,000.

Brady Inc Produced and Sold 200,000 Units for $50 Each Last