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Honda Motor Company is considering offering a $1,300 rebate on its minivan, lowering the vehicle's price from $39,000 to $37,700. The marketing group estimates that
Honda Motor Company is considering offering a $1,300 rebate on its minivan, lowering the vehicle's price from $39,000 to $37,700. The marketing group estimates that this rebate will increase sales over the next year from 36,000 to 52,000 vehicles. Suppose Honda's profit margin with the rebate is $5,900 per vehicle. If the change in sales is the only consequence of this decision, what are its benefits and costs? Is it a good idea? The benefits are $ million. (Round to one decimal place.)
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