Global Sports Equipment manufactures and sells 10 different models of sports gear. Global is contemplating a...
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Global Sports Equipment manufactures and sells 10 different models of sports gear. Global is contemplating a 6% price cut across the board for all 10 models. It expects the price cut to result in a 9% increase in the number of units sold for models A101, A103, A105, and A107. Global expects the other six models (A102, A104, A106, A108, A109, and A110) to experience a 5% increase in the number of units sold. Assess the impact of the price cut on Global’s profits.
Model
Sales Price
Variable Costs
Sales Volume
A101
$55
$25
2,000
A102
$65
$30
3,500
A103
$75
$35
4,000
A104
$85
$40
5,500
A105
$95
$45
3,000
A106
$105
$50
2,500
A107
$115
$55
2,200
A108
$125
$60
1,800
A109
$135
$65
1,500
A110
$145
$70
1,200
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