ABC Ltd manufactures and sells sole products for Rs. 50 per unit and has a variable cost per unit of Rs. 20. The accounts of the company for the year 2009 are expected to reveal a profit of Rs. 7,00,000 after charging fixed costs of Rs. 5,00,000.

Market-sensitivity tests suggest the following responses to price charges:

Alternatives

Selling price reduced by

Quantity sold increased by

A

5%

10%

B

7%

20%

C

10%

25%

Evaluate these alternatives and state which alternative, on to be profitability consideration, should be adopted for the forthcoming year, assuming the cost structure to be unchanged from 2009.