No haggle sales policy, You are the owner of a local Honda

No haggle sales policy

Assignment Help Business Economics

Reference no: EM13987005

You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $1.5 million. In your market, you compete against two other dealers, and the market-level price elasticity of demand for midsized Honda automobiles is -1.6. In each of the last five years, your dealership has sold more midsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 25 percent off the manufacturer’s suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is $14,000.

What price should you charge for a midsized automobile if you expect to maintain your record sales?

Instruction: Round your answer to two decimal places.

Reference no: EM13987005

Questions Cloud

Social-environmental and economic inputs : Discuss the concept of "value" as it relates to social, environmental, and economic inputs. How is value perceived differently from different stakeholders? When looking at sustainability, why is "value" important? What types of metrics help to qua..

Debated whether or not market revolution : Historians have debated whether or not a “Market Revolution” took place in the United States during the first half of the nineteenth century. Was the Market Revolution simply a “transportation and communication revolution,” or is there evidence that ..

Changing the demand and cost structures : A new firm successfully enters a three-firm Cournot oligopoly without changing the demand and cost structures. The new price becomes:

Finding and retaining software programmers : You basically spend your time in an isolated office writing code and sitting in meetings during which you participate in looking for and evaluating hundreds of current employees and potential employees. Microsoft has no problem in finding and reta..

No haggle sales policy : You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $1.5 million. In your market, you compete against two other deal..

Considering selling several units of homogeneous product : A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 120 - 0.5P, and the marginal cost of production is $150. Determine the optimal number of units to put in..

Assuming cost conditions in the industry remain constant : Suppose that initially the price is $20 in a perfectly competitive market. Firms are making zero economic profits. Then the market demand shrinks permanently, some firms leave the industry, and the industry returns to a long-run equilibrium. What wil..

How much output should the firm produce in the short run : A firm sells its product in a perfectly competitive market where other firms charge a price of $120 per unit. The firm’s total costs are C(Q) = 60 + 8Q + 2Q2. How much output should the firm produce in the short run? What price should the firm charge..

What should promotion and pay raises be based on seniority : ASSIGNMENT: What should promotion and pay raises be based on, seniority, performance, education

User Account

All Pages