Gorfin, Inc. currently sells 15,000 units a month for $50 each, has variable costs of...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Gorfin, Inc. currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. Gorfin is considering increasing the price of its units to $60 per unit. This will not affect costs, but demand is expected to drop 20%. Should Gorfin increase the cost of its product?
A. Yes, profit will increase $30,000.
B. Yes, profit will increase $150,000.
C. No, profit will decrease $150,000.
D. No, profit will decrease $30,000.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
