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Minden Company introduces a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5000 units for each $2 reduction in the selling price. The company's present selling price is $90 per unit, and variable expenses are $60 per unit. Fixed expenses are $835,80 per unit. The resent annual sales volume (at the $90 selling price) is 25,200 units.
Question 1: Assuming market studies are correct, what is the maximum annual profit that the company can earn with how many units and what selling price per unit would the company generate this profit?
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