Answer the Following Questions Using the Information Below

question 175

Multiple Choice

Answer the following questions using the information below:
Block Island TV currently sells large televisions for $360. It has costs of $280. A competitor is bringing a new large television to market that will sell for $300. Management believes it must lower the price to $300 to compete in the market for large televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Block Island TV sales are currently 100,000 televisions per year.
-What is the change in operating income if marketing is correct and only the sales price is changed?

• A) $2,200,000
• B) $600,000
• C) $(2,200,000)
• D) $(5,800,000)

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Definitions:

Delinquency

Behaviors by minors that are against the law or delinquent acts, often associated with juvenile crime.

Moral Reasoning

The process by which individuals think about, analyze, and evaluate moral issues and decisions.

Delinquency

Behavior, especially of a young person, that is illegal or not acceptable to most people, often involving criminal activities.

Interventionists

Individuals or entities that actively intervene or become involved in situations, typically to effect change or provide assistance.