Use the following information to determine the break-even point in units (rounded to the nearest whole unit): Unit sales 58,000
1 answer:
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Price elasticity can be calculated using the attached formula where:
the first term represents the % change in quantity and the second term represents the % change in price
% change in quantity = (100-120) / (220/2) = -2/11 x 100 = -18.1818%
% change in price = (7-5) / (12/2) = 33.3333%
price elasticity = 18.1818/33.3333 = 0.55
Note that the price elasticity is usually taken as an absolute value.
the first term represents the % change in quantity and the second term represents the % change in price
% change in quantity = (100-120) / (220/2) = -2/11 x 100 = -18.1818%
% change in price = (7-5) / (12/2) = 33.3333%
price elasticity = 18.1818/33.3333 = 0.55
Note that the price elasticity is usually taken as an absolute value.
Answer:
Please find the complete solution in the attachment file.
Explanation:
Please find the attachment table for the 3 years of cash flow:
