Use the Information for the Question(s)below

question 56

Multiple Choice

Use the information for the question(s) below.
Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor,the Glucoscan 3000,to diabetic patients for $129.GSI plans on lowering their price next year to $99 per unit.The cost of goods sold for each Glucoscan unit is $50,and GSI expects to sell 100,000 units over the next year.
-Suppose that if GSI drops the price on the Glucoscan 3000 immediately,it can increase sales over the next year by 30% to 130,000 units.The incremental impact of this price drop on the firm's EBIT is closest to:

• A)a decline of $1.5 million.
• B)an increase of $1.5 million.
• C)a decline of $2.4 million.
• D)an increase of $2.4 million.

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Definitions:

Natural Selection

Darwin's theory by which traits that enhance survival and reproduction become more common in successive generations of a population.

Successive Generations

Refers to the series of offspring that follow one after another in a biological lineage, each inheriting genetic material from the previous generation.

Mating Between Relatives

The breeding of organisms that are closely related genetically, often leading to an increased chance of hereditary health problems.

Population Genetics

The study of the distribution and changes of allele frequency in a population, as influenced by evolutionary processes.