The Uli Stove Company is developing a “professional-model” stove
aimed at the home market. The company estimates that variable costs
will be $2,670 per unit and fixed costs will be $12,000,000 per
year.
Suppose the company wants to set its price equal to full cost
plus 20 percent. To determine cost, the company must estimate the
number of units it will produce and sell in a year. Suppose the
company estimates that it can sell 6,000 units. What price will...