Electronic Component Company (ECC) Is a Producer of High-End Video

question 53

Multiple Choice

Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" video player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with a new video player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 video players per year.

Irrespective of the competitor's price, what is EEC's required selling price if the target profit is 25% of sales and current costs cannot be reduced?

• A) $280.00.
• B) $292.50.
• C) $299.00.
• D) $308.50.

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Definitions:

Exchanging Information

The process of giving, receiving, and sharing data, knowledge, or ideas between individuals or entities.

Message Privacy

The aspect of communication security that pertains to protecting messages from unauthorized access and ensuring confidentiality.

High-Tech Culture

Refers to a workplace or societal environment that emphasizes and readily adopts advanced technological tools and innovations.

Distracting

Causing one's attention to be diverted from the task at hand or disrupting concentration or focus.