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Honda Motor Company is considering offering a $ 1800 rebate on its minivan, lowering the vehicle's price from $30300 to $ 28500. The marketing group

Honda Motor Company is considering offering a $ 1800 rebate on its minivan, lowering the vehicle's price from $30300 to $ 28500. The marketing group estimates that this rebate will increase sales over the next year from 38500 to 53900 vehicles. Suppose Honda's profit margin with the rebate is $ 5910 per vehicle. If the change in sales is the only consequence of this decision, what are its costs and benefits? Is it a good idea? Hint: View this question in terms of incremental profits.

The cost of the rebate will be $ ___ million. (Round to one decimal place.)

The benefit of the rebate will be $ __ million.(Round to one decimal place.)

Is it a good idea?____ Offering the rebate does look attractive.

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