Because customers have different needs and expectations, the key to distributive fairness in service recovery is
1 answer:
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Answer:
The company should accept the idea because profit will increase by $24,000.
Explanation:
A company is currently selling 10,000 units of product monthly for $40 per unit.
The unit contribution margin is $27.
The company believes that spending $50,000 per month on advertising will allow them to increase the selling price to $45 and that sales will increase by 750 units per month.
The unit contribution margin is the difference between selling price and variable cost per unit.
An increase in the selling price of $5 will cause the contribution margin to increase by $5, from $27 to $32.
Profits is the product of contribution margin and number of output.
At initial price, the profit was
=
= $270,000
At the new price the profit will be
= - $50,000
= $344,000 - $50,000
= $294,000
The increase in profit
= $294,000 - $270,000
= $24,000
Answer: Option (B) is correct.
Explanation:
The nominal GDP is equal to the real GDP in the base year, that's why GDP deflator in the base year is equal to 100.
GDP deflator is calculated as the nominal GDP divided by the real GDP multiply by 100. It is shown as:
GDP deflator =
GDP deflator would be used as the conversion factor that transformed the real GDP into nominal GDP.