Billings company has developed the following budgeted income statement: sales revenue (2,300 units × $14 sales price) $ 32,200 total variable expenses (2,300 × $6 per unit) (13,800 ) contribution margin 18,400 fixed expenses (10,000 ) net income $ 8,400 the company is experimenting with new engineering techniques and believes it can reduce variable cost to $4.50 per unit and significantly improve the product. the innovations would double fixed costs but the company expects to be able to increase sales to 3,500 units. if this strategy is pursued the company's budgeted net income will:

10. problems and applications q10 a market is described by the following supply-and-demand curves: qsqs = = 2p2p qdqd = = 300â’p300â’p the equilibrium price is $ and the equilibrium quantity is . suppose the government imposes a price ceiling of $90. this price ceiling is , and the market price will be $ . the quantity supplied will be , and the quantity demanded will be . therefore, a price ceiling of $90 will result in . suppose the government imposes a price floor of $90. this price floor is , and the market price will be $ . the quantity supplied will be and the quantity demanded will be . therefore, a price floor of $90 will result in . instead of a price control, the government levies a tax on producers of $30. as a result, the new supply curve is: qsqs = = 2(pâ’30)2pâ’30 with this tax, the market price will be $ , the quantity supplied will be , and the quantity demanded will be . the passage of such tax will result in .