Metropolitan, Inc., sells one of its products for $40 each. Sales volume averages 2,000 units per year. Recently, its main competitor reduced the price of its product to $28. Metropolitan expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,000) is as follows:
Required:

Question

Metropolitan, Inc., sells one of its products for $40 each. Sales volume averages 2,000 units per year. Recently, its main competitor reduced the price of its product to $28. Metropolitan expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,000) is as follows:
  Required:

Quizplus · Accepted Answer

The Answer of Metropolitan, Inc., sells one of its products for $40 each. Sales volume averages 2,000 units per year. Recently, its main competitor reduced the price of its product to $28. Metropolitan expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,000) is as follows:
  Required: