The table below is similar to Table 11.2 in the text. It shows the number of customers switching and repeating in two consecutive purchase periods for Brand A and restaged Brand B. In this problem, we indicate that a brand is restaged by an apostrophe, for example, B′.

Based on the fourth purchase occasion, what would be the penalty cost of this redesign by Brand B to Brand A? As in the text, assume that the total market demand is ten million units per month and each unit sells for $5.

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Time 1 Brand A at Time 2=A(2) Brand B'at Time 2 = B'(2) Total Brand A(1) 30 repeaters: A(1) to A(2)=50% 30 switchers: A(1) to B'(2)-50% 60 Brand B'(1) 24 switchers: B'(1) to A(2) = 60% 16 repeaters: B'(1) to B(2) = 40% 40 Total 54 46 100