Question
Consider a case where a manufacturer (not at capacity) decides to accept a customer's offer low-ball offer to buy a product with a special-case deeply
Consider a case where a manufacturer (not at capacity) decides to accept a customer's offer "low-ball" offer to buy a product with a "special-case" deeply discounted price. The price is above the product's variable/traceable costs and the quantity fits within available capacity so the transaction mathematically adds to the firm's profits.
While accepting this offer might be a good idea, what two concerns might make accepting this offer a bad idea? Number your short answers 1 and 2 to match the guidance below.
1. The first concern relates to the value of available capacity?
2. The second concern relates to the future behavior of the firm's customers?
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