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Brand X Computers makes and sells computers. Each computer sells for $400. The following cost data per computer are based on a full capacity of 10,000 computers each period: Brand X is considering a special order for a sale of 2,500 computers to an overseas customer. The only selling costs that would be incurred for the order would be shipping charges of $15 per computer. Brand X is currently selling 7,500 computers through its regular orders. What should be the minimum selling price per computer in negotiating a price for the special order.
Cross Elasticity
A measure of how the quantity demanded of one good responds to a change in the price of another good.
Substitute Goods
Products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises.
Cross Elasticity
A measure of how the quantity demanded of one good responds to a change in the price of another good, indicating the degree of substitutability or complementarity between them.
Percentage Change
A mathematical calculation that shows how much a quantity has increased or decreased in percentage terms over a specific period.
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