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Honda Motor Company is considering offering a $2,000 rebate on its minivan, lowering the vehicle's price from $30,000 to $28,000 . The marketing group estimates
Honda Motor Company is considering offering a $2,000 rebate on its minivan, lowering the vehicle's price from $30,000
to $28,000. The marketing group estimates that this rebate will increase sales over the next year from 40,000 vehicles to 55,000.Suppose Honda's profit margin with the rebate is $6,000 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 how many millions of $?
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