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Hewlett-Packard Corporate Strategy Interview Question

"I was asked to find out how total quantity sold will be impacted if the company were to make the same net profit as before while increase the price by 10% (Cost remains same)."
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Answer

Part of a Corporate Strategy Interview Review - one of 1,500 Hewlett-Packard Interview Reviews

Answers & Comments

1
of 2
votes

I tried questioning the fixed cost and economies of scale equation - but it was none of that. Think of it as a high school arithmetic question..

- Interview Candidate on May 7, 2009
0
of 0
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if net profit originally was 2%, a 10% increase in price would cause the net profit to increase by 6 times. To compensate, the qty would need to go down by 6 times.

if net profit originally was 50%, a 10% increase in price would increase net profit just by 20%. To compensate, the qty would need to go down only 20%.

- someone on Jul 17, 2010

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