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Honda Motor Company is considering offering a $2,100 rebate on its minivan, lowering the vehicle's price from $30,600 to $28,500. The marketing group estimates that

image text in transcribed Honda Motor Company is considering offering a $2,100 rebate on its minivan, lowering the vehicle's price from $30,600 to $28,500. The marketing group estimates that this rebate will increase sales over the next year from 41,500 to 55,400 vehicles. Suppose Honda's profit margin with the rebate is $6,470 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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