Troy City Inc

question 10

Multiple Choice

Troy City Inc., manufactures a product and is considering raising the price by $20 a unit for the coming year. With a $20 price increase, demand is expected to fall by 2500 units.

Would you recommend the $20 price increase?

• A) No, because demand decreased.
• B) No, because the contribution margin decreases.
• C) Yes, because inventory turnover increases.
• D) Yes, because operating income increases.

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Definitions:

Genetics

The science of inherited traits.

Geography

The study of Earth's landscapes, environments, and the relationships between people and their environments.

Stimulus Motive

A motive that appears to be unlearned but causes an increase in stimulation, such as curiosity.

Unlearned

Behaviors and responses not acquired through learning or conditioning; innate.