Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. Currently, it costs the company $330 to produce each axle. The company wishes to make a profit equal to 20% of the price. Which of the following strategies should Equival adopt to achieve its objective?
1) Raise the price to $410.
2) Reduce its production costs by $10 per unit.
3) Increase the production costs by $20 per unit.
4) Use advertising to increase the volume of sales.