Question
In the last year, Bakers Score's Donuts and Sweets has sold, on average,1,228''Fudgie'' brownies per week. This week they introduced fat-free brownies and sold240at a
In the last year, Bakers Score's Donuts and Sweets has sold, on average,1,228''Fudgie'' brownies per week. This week they introduced fat-free brownies and sold240at a price of$4each. They noticed the cannibalization rate of fat-free brownies on Fudgie brownies was43%. Bakers Score's sells their "Fudgie" brownies for$3, with a variable cost of$1. The new Fat-Free Brownies have a variable cost of$2.
In week 2, "Fudgie" brownie sales dropped to 850 units sold, while sales for Fat-Free brownies remained constant. If all of the decrease in Fudgie sales is due to the fat-free product, what would be the cannibalization rate based on week 2 sales figures instead of the previous week's?
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