Question
1. Imagine that you are advising a small new tar dealership. They ask: A) given the information below, what is the best price they should
1. Imagine that you are advising a small new tar dealership. They ask:
A) given the information below, what is the best price they should put on all the cars. assuming every buyer pays the same price and how much profit will they make ?
B) is there a better way to make profits and how much profit could they make ? why might this strategy be difficult to use? The firm can't change their costs. But they could use a different pricing scheme. not charging every customer the same price.
Fixed cost for business is $4000
Variable cost is $20.000 for each car they get from the manufacturer.
They anticipate the following customers.
Ms. Rich would pay upto $30.000
Mr. Upper Middle would pay up to $26,000
Ms. Middle would pay up to $22.000
Mr. Lower middle would pay upto $18000
Ms. Poor would pay upto $16000
Please give proper explanation , thanks.
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