The Manager of Calypso,Inc

question 41

Essay

The manager of Calypso,Inc.is considering raising its current price of $30 per unit by 10%.If she does so,she estimates that demand will decrease by 20,000 units per month.Calypso currently sells 50,000 units per month,each of which costs $25 in variable costs.Fixed costs are $180,000.
a.What is the current profit?
b.What is the current break-even point in units?
c.If the manager raises the price,what will profit be?
d.If the manager raises the price,what will be the new break-even point in units?
e.Assume the manager does not know how much demand will drop if the price increases.By how much would demand have to drop before the manager would not want to implement the price increase?

---

Definitions:

Source Notes

are annotations or references that provide information about the origin of certain data, facts, or quotations in a scholarly or research context.

Content Notes

Brief annotations or remarks made to highlight or explain specific points within a document or presentation.

MLA Style

A set of guidelines for formatting written works, as prescribed by the Modern Language Association, often used in academic writing.

In-Text Citations

References within the body of a document that acknowledge the source of information or quotations.