Question

EasyFind manufactures and sells golf balls. The company is conducting a price test to find a better price point. Presently their golf balls sell for $23 per dozen. Their current volume is 4,470 dozen per month. They are considering reducing their sales price by 26% per dozen

If EasyFind chooses to reduce its selling price to the new price point, how many units would they have to sell to generate the same monthly revenue?

Answer 1

EasyFind would need to sell approximately 6,040 dozen golf balls at the new price point of $17.02 per dozen to maintain the same monthly revenue of $102,810 after a 26% price reduction.

Step-by-step explanation:

To determine how many units EasyFind would need to sell to generate the same monthly revenue after reducing the price by 26%, we must first calculate the new price per dozen and then solve for the new volume required to match the current total revenue.

Current revenue is calculated as the current price multiplied by the current volume: $23 per dozen × 4,470 dozen = $102,810 per month.

After a 26% price reduction, the new price per dozen would be $23 × (1 - 0.26) = $17.02 per dozen.

To find the required new volume (V) to maintain the same monthly revenue, we set up the equation: $17.02 per dozen × V = $102,810. Solving for V gives us V = $102,810 / $17.02 per dozen, which equals approximately 6,040 dozen.

Therefore, EasyFind would need to sell about 6,040 dozen of golf balls at the new price point to generate the same monthly revenue.