Sesnie Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Hartford. Land and labor are inexpensive, and competition among developers is fierce.

The homes are "cookie$-$cutter," with any upgrades added by the buyer after the sale. Sesnie Builders' costs per developed sublot are as follows:

View the costs.

Sesnie Builders would like to earn a profit of $16\%$ of the variable cost of each home sale. Similar homes offered by competing builders sell for $$201,000$ each.

Read the requirements.

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

Sesnie will need to emphasize a

approach to pricing. Because the tract homes are

stiff competition, Sesnie will

control

over pricing.