Use the Information for the Question(s) Below

question 2

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.Also suppose that for each Glucoscan monitor sold,GSI expects additional sales of $100 per year on glucose testing strips and these strips have a gross profit margin of 75%.Considering the increase in the sale of testing strips,the incremental impact of this price drop on the firms EBIT is closest to:

• A) A decline of 1.5 million
• B) A decline of 0.7 million
• C) An increase of 0.7 million
• D) An increase of 1.5 million

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Definitions:

Psyche

Psyche is a term used in psychology to refer to the human mind or soul, encompassing conscious and unconscious components of thought and emotions.

Patients' Reports

Patients' reports refer to firsthand accounts given by individuals receiving care on their symptoms, experiences, and outcomes within a healthcare context.

Freudian Concepts

Theories and ideas developed by Sigmund Freud, focusing on the unconscious mind, psychosexual stages, and defense mechanisms.

Scientific Support

Refers to the evidence or backing for a theory, idea, or practice that is derived from scientific methods and research.