Sports Gear Pro manufactures and sells 9 different models of sports equipment. Sports Gear Pro is...
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Sports Gear Pro manufactures and sells 9 different models of sports equipment. Sports Gear Pro is contemplating a 6% price cut across all 9 models. It expects the price cut to result in an 8% increase in the number of units sold for models SS4501, SS4503, and SS4505. The other six models (SS4502, SS4504, SS4506, SS4507, SS4508, and SS4509) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Sports Gear Pro’s profits.
Model
Sales Price
Variable Costs
Sales Volume
SS4501
$70
$35
1,800
SS4502
$80
$40
2,000
SS4503
$90
$45
2,500
SS4504
$100
$50
3,000
SS4505
$110
$55
3,500
SS4506
$120
$60
4,000
SS4507
$130
$65
4,500
SS4508
$140
$70
5,000
SS4509
$150
$75
5,500
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