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Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $98 per unit, and variable expenses are $68 per unit. Fixed expenses are $831,300 per year. The present annual sales volume (at the $98 selling price) is 25,700 units.

Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91708736

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