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You are the pricing manager for Flab-o-matic, a best-selling weight loss drug. You sell your product in the US and Canada, but at different prices;
You are the pricing manager for Flab-o-matic, a best-selling weight loss drug. You sell your product in the US and Canada, but at different prices; the list price per dose is $20 in the US and $15 in Canada, and you have charged those prices for approximately the last two years. To gain market information, your team has selected two markets Miami and Ottawa and is running price promotions there. Miami makes up about 4% of total US Sales, and Ottawa makes up about 7% of Canadian sales. You cut prices in Miami to $15 per dose, and cut prices in Ottawa to $12 per dose. Your unit sales last year were 1.9 million units in the US, and 122,000 in Canada. Your unit sales increase 50% as a result of your price promotion in Miami, but only 40% in Ottawa. Propose (and justify) revisions to your US and Canadian pricing strategies, under the assumption that your marginal cost per dose is $8
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