How much would unit sales have to increase

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Reference no: EM13219651

Mrs. Y is currently selling 30,000 tons of Brand X fertilizer annually for $40 per ton, retail. She purchased it wholesale at $31 per ton.

A. A large cooperative offered to purchase 30,000 tons annually if she reduces her

Listed retail price per ton. How much of a reduction in retail price can Ms. Y

afford without altering her business gross profit (margin)? What is the new price she will offer?

B. Suppose she is forced to decrease her retail price 10 percent, how much would unit sales have to increase before her gross profit (margin) would be no less than prior to the price decrease?

Reference no: EM13219651

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