a new DVD player that will sell for a price of $220. ECC feels
that
it must reduce its price to $220 in order to compete. The sales
and
marketing department of ECC believes the reduced price will
cause sales to increase by 15%. ECC currently sells 200,000
DVD
players per year.
Assuming sales and marketing are not correct in their estimation
and the volume of sales is not changed and ECC meets the
competitive price, what is the target cost if ECC wants to
maintain
its same income level?
Student Answer:
$210.
$200.
$190.
$180.