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Question - Consider the following information: Your company makes widgets. You are trying to figure out what volume (how many units) you need to sell in order to make a profit. You are also considering raising the sales price. Relevant information follows:
2018 Price: $25 per widget
Variable expenses per widget: $10Fixed Expenses: $50,000
Sales at this price: 10,000 widgets
If you were to raise your price to $30 per widget, you would sell 8,000 widgets in 2019.
If you were to lower your price to $20 per widget, you would sell 12,500 widgets in 2019. Should you raise the price, lower the price or keep it the same? Why? Show your calculations.
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