PNG's Managers Estimate That a 50% Increase in Price Would

Multiple Choice

PNG's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs are $4,000, based on production of 400 units. The following values may be useful: PNG's profit maximising price is:

A) $3.37
B) $7.57
C) $2.44
D) $13.36