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Management Studies

Management believes they can increase the price per chair by 10 percent in this new situation and will improve profits by 10 percent. However, the sales department cautions that the price increase may decrease their sales by 10 percent because they will be higher-priced than the competition. Because the chair business uses price as one of its major competitive factors, the sales department feels that sales will be hurt. Using our model, what will happen to profits if both of their forecasts are correct?

a. Profits increase 12.5 percent.

b. Profits decrease 11.3 percent.

c. Profits increase 6.7 percent.

d. Profits increase 7.4 percent.

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9105511

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