Global Sports Equipment manufactures and sells 10 different models of sports gear. Global is contemplating a...
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Global Sports Equipment manufactures and sells 10 different models of sports gear. Global is contemplating a 6% price cut across the board for all 10 models. It expects the price cut to result in a 9% increase in the number of units sold for models A101, A103, A105, and A107. Global expects the other six models (A102, A104, A106, A108, A109, and A110) to experience a 5% increase in the number of units sold. Assess the impact of the price cut on Global’s profits.
Model | Sales Price | Variable Costs | Sales Volume |
A101 | $55 | $25 | 2,000 |
A102 | $65 | $30 | 3,500 |
A103 | $75 | $35 | 4,000 |
A104 | $85 | $40 | 5,500 |
A105 | $95 | $45 | 3,000 |
A106 | $105 | $50 | 2,500 |
A107 | $115 | $55 | 2,200 |
A108 | $125 | $60 | 1,800 |
A109 | $135 | $65 | 1,500 |
A110 | $145 | $70 | 1,200 |
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