Exam-style practice

Business economics practice questions

Practise mixed syllabus-aligned questions for Business economics. Aligned to Pearson Edexcel International GCSE (9-1) Economics.

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Question 21 of 42

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A technology start-up, 'InnoTech Solutions', has recently launched a new software product. Due to intense competition, InnoTech is considering lowering its product price from $200 to $180 per unit. Initially, they sold 500 units per month at $200. With the price reduction, they anticipate sales will increase to 600 units per month. InnoTech's total fixed costs are $30,000 per month, and the variable cost per unit is $50. Analyse the financial impact of this price reduction on InnoTech Solutions' monthly profit, showing your calculations. [8 marks]