Adventure Sports manufactures and sells 7 different models of adventure gear. Adventure Sports is contemplating a...
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Adventure Sports manufactures and sells 7 different models of adventure gear. Adventure Sports is contemplating a 6% price cut across all 7 models. It expects the price cut to result in an 8% increase in the number of units sold for models GG3301, GG3303, and GG3305. The other four models (GG3302, GG3304, GG3306, and GG3307) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Adventure Sports’ profits.
Model | Sales Price | Variable Costs | Sales Volume |
GG3301 | $70 | $35 | 1,800 |
GG3302 | $80 | $40 | 2,000 |
GG3303 | $90 | $45 | 2,500 |
GG3304 | $100 | $50 | 3,000 |
GG3305 | $110 | $55 | 3,500 |
GG3306 | $120 | $60 | 4,000 |
GG3307 | $130 | $65 | 4,500 |
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