Answer the Following Questions Using the Information Below:
Bright Lights

question 32

Multiple Choice

Answer the following questions using the information below:
Bright Lights Company manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year.With a 50-cent price increase,demand is expected to fall by 3000 units.
$$\begin{array} { l r r } & \text { Currently } & \text { Projected } \\\text { Demand } & 20000 \text { units } & 18000 \text { units } \\\text { Selling price } & \$ 4.50 & \$ 5.00 \\\text { Incremental cost per unit } & \$ 3.00 & \$ 3.00\end{array}$$
-Would you recommend the 50-cent price increase?

• A)Yes,because contribution margin per unit increases.
• B)No,because the selling price increases.
• C)No,because demand decreased.
• D)Yes,because operating profits increase.

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Definitions:

Adoptive Parents

Individuals or couples who become parents through the legal process of adoption, assuming the full parental responsibility for a child who is not biologically their own.

Adopted Children

Children who are legally taken and raised by parents not biologically related to them, following a legal process.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing behavior, thoughts, and emotions.

Correlation

A measure that indicates the extent to which two variables fluctuate together.