Acme Boats builds the "Bass Blaster," an 18-foot fishing boat. They recently discontinued the model but have detailed cost data indicating that the average costs of production were $8000 per boat. They have 5000 units left in inventory. At a recent marketing meeting the nephew of the CFO and the son-in-law of the marketing director (both important officials) had a heated argument about what to do with the unsold boats. The relevant quotes are as follows:

Nephew: "We have got to clear the inventory, even though we can't engage in price discrimination, we should just cut price to sell every one."

Son-in-law: "Are you INSANE? We can't charge less than average costs or we'll lose money."

They may both be wrong. Explain. (Assume the nephew is correct about price discriminationthat Acme can only set a single price.)