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Eastern Semiconductor is currently selling its most popular microchip for $220. It has been selling 4,000 of these chips per month. The company has learned, however, that next month an overseas competitor will enter the market and start selling a copy of this chip for $200. If Eastern maintains its price of $220 per chip, it expects its sales to decrease to 3,000 units per month.
Given that Eastern's variable costs for this product are $40 per chip, what is the breakeven sales level for Eastern decreasing its price by $20 per chip?
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You begin your research in deciding if and what the global strategy should be. You get your team together and begin to discuss a plan on how you will research.
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