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Korvikt [17]
3 years ago
5

Summit Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would

be willing to pay $90 for such a widget and that 50,000 units could be sold each year at this price. The current cost to produce the widget is estimated to be $65. Summit has learned that a competitor plans to introduce a similar widget at a price of $80. If Summit requires a 25% return on sales, what is the target cost for the new widget? Group of answer choices
Business
1 answer:
astra-53 [7]3 years ago
8 0

Answer:

$60

Explanation:

For computing the target cost, first we have to determine the profit per unit which is shown below:

= Selling price × return on sales percentage

= $80 × 25%

= $20

Now the target cost would be

= Selling price per unit - profit per unit

= $80 - $20

= $60

All other information which is given is not relevant. Hence, ignored it

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C. The speed with which general prices are rising

Explanation:

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The consumer price index or CPI is the most acceptable index used in determining the rate of inflation. Inflation may result from high economic growth where firms and individuals have increased incomes resulting in too much money in circulation.  A moderate level of inflation is required to promote spending and sustain favorable economic growth.

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Read 2 more answers
If the price elasticity for frappuccinos is 0.6, by how much would unit sales drop?
shusha [124]

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Frappuccinos are almost always loaded with fat, sugar, and calories, except for the Coffee Light Frappuccino, featured as one of the healthiest Starbucks drinks on this list. All four of Starbucks' unhealthiest drinks are frappuccinos.

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8 0
1 year ago
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