You woke up this morning to a troubling advertisement on TV: A+ Rental Cars' local competitor is discounting their economy rentals. After doing a little digging, you discover that your competitor has launched an aggressive advertising campaign, reducing the price on their economy line from $32.99 to $24.99. Based on your knowledge of previous pricing practices, you expect a similar price reduction across all vehicle types. In your memo or short business report, include answers to the following questions:

1. It would be labor intensive to re-analyze your situation every time your competitor changed their prices. Is there a way to develop a formula that would help you quickly pick a price in response to the price setting behavior of your competitor? Be as systematic as possible. A general, concise solution is ideal. Document the process you used to arrive at the "formula".