Bright Inc., manufactures table lamps and is considering raising the price by $50 a unit for the coming year. With a $50 price increase, demand is expected to fall by 2200 units.
Currently Projected
Demand 21,000 units 18,800 units
Selling price $160 $210
Variable costs per unit $120 $120
Bright Inc., has a capacity to produce 26,200 units. Due to an increase in the electricity costs, there is a sudden spike in demand by 2200 units. If the company adopts peak-load pricing policy and charges a premium of 20% over the current sales price, what is the total contribution on the sale of additional units?