Return to the bicycle manufacturer NatBike in Exercise 6. Assume that the plant has a capacity of
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Return to the bicycle manufacturer NatBike in Exercise 6.
Assume that the plant has a capacity of 20,000 bicycles. If additional capacity can be added at a cost of $25 per bicycle, how should NatBike price to each of the two segments and how much capacity should it add? How are profits affected relative to Exercise 6?
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