Answer the Following Questions Using the Information Below:
Laver Shavers

question 119

Multiple Choice

Answer the following questions using the information below:
Laver Shavers manufactures electric shavers and is considering decreasing the price by $2.50 a unit for the coming year.With a $2.50 price decrease,the unit demand is expected to increase by 25%,and a high volume materials discount is expected to decrease the variable costs per unit by $1 per unit.
$\begin{array}{lrr}&\text { Currently } & \text { Projected } \\\text { Demand } & 10000 \text { units } & 12500 \text { units } \\\text { Selling price } & \$ 51 & \$ 48.50 \\\text { Variable costs per unit } & \$ 45 & \$ 44\end{array}$
-The demand for this product is:

• A)slightly inelastic.
• B)greatly inelastic.
• C)elastic.
• D)indeterminable.

Understand the behavior of firms in perfectly competitive markets, including how prices and outputs are determined.

Analyze the relationship between total revenue (TR), total cost (TC), marginal revenue (MR), and marginal cost (MC) and their implications for profit maximization.

Interpret demand curves and how they affect the pricing and output decisions of perfectly competitive firms.

Calculate profit maximizing levels of output using marginal analysis.