medium · GMAT Verbal Reasoning
A company plans to increase its annual revenue by raising the price of its main product by 10%.
The company's plan depends on which of the following assumptions?
- The resulting drop in units sold will be small enough that price times quantity still rises.
- Rival firms selling competing products will respond by raising their own prices to a similar degree.
- The product's overall quality will be noticeably improved at the same time the price hike takes effect.
- The cost of manufacturing each unit of the product will stay constant after the price increase.
- Customers regard the product as having absolutely no acceptable substitute available at any price at all.
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