Multiple Choice
Answer the following questions using the information below:
Ace Books Company currently sells eBook readers for $270.It has costs of $210.A competitor is bringing a new eBook reader to market that will sell for $225.Management believes it must lower the price to $225 to compete in the market for eBook readers.Marketing believes that the new price will cause sales to increase by 10%,even with a new competitor in the market.Ace's sales are currently 10 000 eBook readers per year.
-What is the change in operating profit if Marketing is correct and only the sales price is changed?
A) $(165 000)
B) $45 000
C) $165 000
D) $(435 000)
Correct Answer:
Verified
Correct Answer:
Verified
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