Gorsche Company's Management Has Found That Every 3% Increase in the Selling

question 57

Multiple Choice

Gorsche Company's management has found that every 3% increase in the selling price of one of the company's products leads to a 8% decrease in the product's total unit sales. The product's absorption costing unit product cost is $11.50. The variable production cost of the product is $6.20 per unit and the variable selling and administrative cost is $1.00 per unit.
According to the formula in the text, the product's profit-maximizing price is closest to:

• A) $11.15
• B) $11.91
• C) $19.65
• D) $17.82

---

Definitions:

Age Group

A classification of people based on their age, often used in demographic, marketing, and research contexts to segment populations.

Adverse Reactions

Unintended, harmful outcomes or side effects experienced after the use or exposure to a drug, treatment, or chemical.

Association

A statistical relationship between two or more variables, indicating that changes in one variable are related to changes in another.

Headaches

A common physical ailment involving pain in the head, scalp, or neck, often associated with muscle tension, stress, or vascular changes.