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.

---

Definitions:

Cycle Billing

The process of invoicing different customers at different times during the month based on a predetermined schedule.

Practice Management (PM) Software System

A type of software designed to manage the day-to-day operations of healthcare practices, including scheduling, billing, and patient records management.

Electronic Medical Record (EMR) System

A digital version of a patient's paper chart that makes information available instantly and securely to authorized users.

Federal Trade Commission (FTC)

a U.S. federal agency established to protect consumers and ensure a strong competitive market by enforcing antitrust and consumer protection laws.