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Question

# At a production level of 500 TVs, the selling price per unit is such that there is a net profit of 20%. What will be the impact on the net profit if the selling price per unit is reduced by 16.66% and the total number of units produced is increased by 40%?

A
it will increase by less than 20% but more than 10%
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B
it will increase by less than 30% but more than 20%
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C
it will decrease by less than 15% but more than 5%
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D
None of these
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Solution

## The correct option is D None of theseFor n = 500, CP/unit = Rs 20,000 SP/unit = Rs 24,000 Profit/unit = Rs 4000 Hence total profit = Rs 20 lacs Now, if the production is increased by 40%, then the total number of units produced = 7000 units. CP/unit = Rs 24000 Total profit = Rs 20 lacs So, the net profit will be the same. Therefore, the correct answer is option (d)

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