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An auto dealership is trying to determine the appropriate price for its new Hybrid car based on customer economic value as well as its internal

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An auto dealership is trying to determine the appropriate price for its new Hybrid car based on customer economic value as well as its internal costs. Given a high level of brand loyalty among the customers of this brand, the assessment of economic value is to be carried out with respect to the same brand that has either a hybrid or conventional engine. Here is the side-by-side performance comparison of two otherwise identical models: Car with conventional gas- Car with hyrid engine powered engine Price to Buyer $26,000 TBD Gas Mileage (MPG) 28 City/36 Hwy 45 City/50 Hwy Typical Ownership 8 Years 8 Years Yearly Maintenance Costs (Avg.) $700 $500 Yearly Insurance Cost $600 $500 Tax Credit $0 $3,000 Trade-in Value at 8 Years $4,000 $3,000 Other Information: The Tax Credit is only given one time. The price of gasoline is $3.00 per gallon. There are two segments of customers: Highway drivers and City drivers. Both types drive 12,000 miles each year. The Highway segment does 25% city driving and 75% highway driving. The City segment does 75% city driving and 25% highway driving

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