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Honda Motor Company is considering offering a $1,800 rebate on its minivan, lowering the vehicle's price from $29,900 to $28,100. The marketing group estimates that

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Honda Motor Company is considering offering a $1,800 rebate on its minivan, lowering the vehicle's price from $29,900 to $28,100. The marketing group estimates that this rebate will increase sales over the next year from 41,800 to 54,200 vehicles. Suppose Honda's profit margin with the rebate is $5,340 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

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