Rudy Enterprises Currently Sells a Piece of Luggage for $200

question 21

Multiple Choice

Rudy Enterprises currently sells a piece of luggage for $200. An aggressive competitor has announced plans for a similar product that will be sold for $170. Rudy's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the luggage is $130, and Rudy has a profit goal of 30% of sales. If Rudy meets competitive selling prices, what must happen to the company's manufacturing and distribution cost?

• A) Nothing, because the costs are within defined ranges and can actually increase by $10.
• B) Nothing, because the costs are within defined ranges and can actually increase by $23.
• C) Costs must decrease by $11.
• D) Costs must decrease by $39.
• E) None of the answers is correct.

---

Definitions:

Folders

Containers used in a computer's operating system to organize files and other folders.

Temperature

A measure of thermal energy within a substance or environment, indicative of the degree of heat or coldness.

Tint

The addition of a color to another color or image, often used to adjust shades or create a specific mood.

Saturation

Saturation in the context of digital imaging and graphics refers to the intensity and purity of colors, impacting their vibrancy and how vivid they appear.