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Dennis' TV Currently Sells Small Televisions for $180

Question 42

Multiple Choice

Dennis' TV currently sells small televisions for $180. It has costs of $140. A competitor is bringing a new small television to market that will sell for $150. Management believes it must lower the price to $150 to compete in the market for small televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Dennis' sales are currently 100,000 televisions per year.
-What is the target cost per unit if the company wants to maintain its same profit margin in total dollars before the change and Marketing is correct?


A) $112.50
B) $113.64
C) $123.34
D) $140.00

Correct Answer:

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