Pascal Corporation Manufactures Numerous Products, One of Which Is Called

question 80

Multiple Choice

Pascal Corporation manufactures numerous products, one of which is called Gamma66. The company has provided the following data about this product:

-Assume that the total traceable fixed expense does not change.If Pascal decreases the price of Gamma66 to $48.96,what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $51.00? (Your answer should be rounded to the nearest 0.1%.)

• A) 4.9%
• B) -10.0%
• C) 13.6%
• D) -7.6%

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Definitions:

Unreasonably Low Prices

Pricing strategies that are significantly below the market average or cost of production, often used to eliminate competition or enter new markets.

Robinson-Patman Act

A United States federal law aimed at preventing unfair competition and price discrimination among businesses.

Price Fixing

When two or more companies collude to set a product’s price.

Federal Trade Commission

A United States government agency that enforces laws related to consumer protection and competition.