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Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no
Pisa Pizza, a seller of frozen pizza, is considering
introducing a healthier version of its pizza that will be low in
cholesterol and contain no trans fats. The firm expects that sales
of the new pizza will be $ million per year. While many of these
sales will be to new customers, Pisa Pizza estimates that
will come from customers who switch to the new, healthier pizza
instead of buying the original version. a Assume customers will
spend the same amount on either version. What level of incremental
sales is associated with introducing the new pizza? b Suppose
that of the customers who will switch from Pisa Pizza's
original pizza to its healthier pizza will switch to another brand
if Pisa Pizza does not introduce a healthier pizza. What level of
incremental sales is associated with introducing the new pizza in
this case?
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