Johnson Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Chicago. Land and labor are cheap, and competition among developers is fierce. The homes are "cookie$-$cutter," with any upgrades added by the buyer after the sale. Johnson Builders' cost per developed sublot are as follows:

$($Click the icon to view the costs.$)$

Johnson Builders would like to earn a profit of $14\%$ of the variable cost of each home sale. Similar homes offered by competing builders sell for $$206,000$ each.

Read the requirements.

Requirement $1.$ Which approach to pricing should Johnson Builders emphasize? Why?

Johnson will need to emphasize a approach to pricing. Because the tract homes are stiff competition, Johnson will control over pricing.