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The accounting department at the corporate office has provided you with some historical cost data. Economy rentals cost $17.10 per day while luxury vehicles cost
The accounting department at the corporate office has provided you with some historical cost data. Economy rentals cost $17.10 per day while luxury vehicles cost $25.12 per day. Regardless of vehicle type, a rental contract requires $8.90 for reconditioning. Additional vehicles can be delivered from the regional hub at a cost of $35/vehicle, on top of the costs above. Do you have any concerns about using this accounting data to set prices? Hint: Consider the difference between average and marginal cost. In addition to answering the questions above, provide pricing recommendations for economy vehicles for the next four weeks.
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