Short Answer
The company’s profits will benefit from an increase in soccer leagues due to higher demand for products like soccer balls and goal nets. Additionally, decreased raw material costs and the opening of new sporting goods stores will further boost profitability by enhancing sales and margins.
Step 1: Understand the Impact of Soccer Leagues
The company’s profits will be positively affected by an increase in the number of soccer leagues. This is because more leagues create a higher demand for essential products like soccer balls and goal nets. With more consumers looking to purchase these items, sales will consequently rise, leading to increased revenue for the company.
Step 2: Evaluate Raw Material Costs
A decrease in the cost of raw materials enhances profitability by allowing the company to maintain their sales prices while increasing their margins. When the cost of production decreases, the company can either lower prices to attract more customers or keep prices steady to enjoy greater profit margins. This positive shift directly boosts the company’s bottom line.
Step 3: Consider Local Market Changes
The opening of two new sporting goods stores in the locality will also positively impact profits. This expansion means increased demand for inventory, driving sales upward. Furthermore, having more stores means customers will have greater access to the products, creating a larger customer base and thus enhancing overall profitability.