Q. Calibrated is debating whether to keep its current price and expand to meet the demand or to raise its price to reduce demand somewhat before deciding whether or not to expand.

1. Explain how much would Calibrator’s weekly profits increase if it expanded to meet the entire amount of its current excess demand?

2. Prepare an analysis of a 10% price increase

Compute the break-even sales quantity (percent and units)

Compute the new $ contribution margin per unit

3. Illustrate what risks might be to Calibrated of increasing price to maximize profit?

Illustrate what risks might there be to Calibrated of expanding output rather than reducing demand through a price increase