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The Variable Speed Company Manufactures a Line of High Quality

question 27

Multiple Choice

The Variable Speed Company manufactures a line of high quality tools. The company sold 1,000,000 hammers at a price of $4 per unit last year. The company estimates that this volume represents a 20% share of the current hammers market. The market is expected to increase by 5%. Marketing specialists have determined that, as a result of a new advertising campaign and packaging, the company will increase its share of this larger market to 24%. Due to changes in prices, the new price for the hammer will be $4.30 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates. What are the estimated sales revenues in the coming year?

Identify the effects of supply and demand shifts on market equilibrium.

Understand the concept of elasticity in relation to supply and demand.

Analyze how changes in the market influence consumer behavior and producer responses.

Comprehend how external factors such as news reports, and changes in consumer income or prices of related goods can influence market dynamics.

Definitions:

Small, sweet baked treats usually made from flour, sugar, and some type of oil or fat, and may include other ingredients such as chocolate chips or nuts.

Batch

A collection or group of goods or items that are processed or produced at the same time.

Daughters

Female offspring in relation to their parents.

Current

The flow of electric charge through a conductor or the flow of water in a stream or ocean.