Knoll,IncCurrently Sells 15,000 Units a Month for $50 Each,has Variable

question 43

Multiple Choice

Knoll,Inc.currently sells 15,000 units a month for $50 each,has variable costs of $20 per unit,and fixed costs of $300,000.Knoll is considering increasing the price of its units to $60 per unit.This will not affect costs,but demand is expected to drop 20%.Should Knoll increase the price of its product?

• A)Yes;profit will increase $30,000.
• B)Yes,profit will increase $150,000.
• C)No,profit will decrease $150,000.
• D)No,profit will decrease $30,000.

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Definitions:

Urban Centers

Populated areas characterized by high density of buildings, people, and significant economic, cultural, and social activities.

Writing

The act or process of forming letters, words, or symbols on a surface, typically to communicate ideas or convey information.

Centralized Political Authority

An organizational structure where a single entity or a small group of entities holds the majority of governing power and control, making key decisions that affect the society or nation.

Warfare

denotes conflict between different groups or states, often involving armed combat, strategies, and tactics to defeat the opponent.