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Honda Motor Company is considering offering a 1800 rebate on its minivan, lowering the vehicle's price from 30,900 to 29,100. The marketing group estimates that
Honda Motor Company is considering offering a 1800 rebate on its minivan, lowering the vehicle's price from 30,900 to 29,100. The marketing group estimates that this rebate will increase sales over the next year from 40,900 to 56,600 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 costs and benefits? Is it a good idea?
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