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PLEASE HELP! Need it in next 20 min You know that the research on mental accounting and framing effects predicts that the integration of gains

image text in transcribedPLEASE HELP! Need it in next 20 min
You know that the research on mental accounting and framing effects predicts that the integration of gains and losses for otherwise equivalent prospects influences evaluation and choice (Johnson, Herrmann and Bauer 1999). Suppose you are a car manufacturer and you took a class in behavioral economics. You would like to make an offer to the potential buyers who previously owned the automobile in question and were considering repurchasing the product. Each offer is for the same base model of automobile with 10 optional extras. . a) How do mental accounting principles guide you in setting the component prices? Explain.(13 points) How do mental accounting principles guide you in setting the component discounts? Explain. (12 points) b)

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