Ch 11 Washburn Guitars

If the mass-produced guitar sells 100,000 units annually at $175 per guitar, what is the total revenue?

$17,500,000

Washburn's fixed costs for producing mass-produced guitars are $500,000. Its variable costs are $150 per guitar. If it prices these guitars at $250, what is the break-even quantity for this line?

5,000 guitars

If Washburn Guitars were to lower the price of the Maya Pro DD75 to $2,499 from $2,699, sales of the guitar would increase 30%. This illustrates:

a product with elastic demand

With the typical downward sloping demand curve like the one shown for Washburn, as price per unit falls, demand:

increases

Washburn Guitars makes signature series guitars to enhance the credibility of the Washburn brand. Creating signature series guitars would have a positive effect on all of the following EXCEPT:

unit variable cost

Washburn has 4 distinct price points for its guitar lines: entry, intermediate, professional, and collectors. Washburn has implemented a _________________ pricing objective.

unit volume