See-Clear Optics is considering producing a new line ofeyewear. Aft er considering the costs of raw materials and the costof some new equipment, the company estimates fi xed costs to be$40,000 with a variable cost of $45 per unit produced.(a) If the selling price of each new product is set at $100, howmany units need to be produced and sold to break even?Use both the graphical and algebraic approaches.(b) If the selling price of the product is set at $80 per unit,See-Clear expects to sell 2000 units. What would be thetotal contribution to profi t from this product at thisprice?(c) See-Clear estimates that if it off ers the product at theoriginal target price of $100 per unit, the company willsell about 1500 units. Will the pricing strategy of $100per unit or $80 per unit yield a higher contribution toprofi t?

See-Clear Optics is considering producing a new line ofeyewear. Aft er considering the costs of raw materials and the costof some new equipment, the company estimates fi xed costs to be$40,000 with a variable cost of $45 per unit produced.(a) If the selling price of each new product is set at $100, howmany units need to be produced and sold to break even?Use both the graphical and algebraic approaches.(b) If the selling price of the product is set at $80 per unit,See-Clear expects to sell 2000 units. What would be thetotal contribution to profi t from this product at thisprice?(c) See-Clear estimates that if it off ers the product at theoriginal target price of $100 per unit, the company willsell about 1500 units. Will the pricing strategy of $100per unit or $80 per unit yield a higher contribution toprofi t?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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