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Question: A company is currently selling 500 units of a product per day at $10 per unit. You can assume that the product's variable costs are constant; they are now at 40 percent of the product's current price. If the company's sales increase above 600 units per day, an incremental fixed cost of $240 will be incurred.

(a) What is the breakeven sales level for a 12 percent price increase?

(b) What is the breakeven sales level for a 12 percent price decrease?

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Marketing Management, Management Studies

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