A competitor sells a tractor for $14,000. Your company has been working on a new product to enter the market and your marginal cost is $8500. Your new tractor is superior in some ways and is inferior in other ways. It is slower so its relative value is decreased by $1000 but it requires less maintenance, which is worth $3500 per tractor. Questions: 1) What is the price of the nearest comparable alternative product to your tractor? 2) What is the differential value of your new tractor in comparison to the competitor product? 3) What is the Exchange Value of the new tractor? 4) What range would you suggest the tractor be priced at on introduction? Case Scenario 2 A retailer is considering a 33% off sale on blenders currently priced $54. The retailer pays $29 per blender to the manufacturer. Questions: 1) What is the initial contribution? 2) What is the proposed sale price and the percent change in price captured per unit sold? 4) 3) What is the volume hurdle that must be achieved for the sale on blenders to improve profits? Suppose that rather than decreasing price, the retailer opts to increase price to $59. What is the allowable loss in number of units sold that would still leave the retailer in the same profit position?