What is your cannibalization rate

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Reference no: EM133360562

You are an artist. You sell signed, limited edition prints of your work for $500. Each print costs you $300 to make. You typically sell 100 prints per year, a number that hasn't changed for several years. Your fixed costs are about $5,000 per year.

Last year, you started selling lower quality posters of your work for $125. These posters cost you $30 to make. You outsource the production of the posters, so the new product does not add to your fixed costs.

You sold 500 of these posters last year, but the number of limited edition prints you sold dropped to 70.

What is your cannibalization rate?

Reference no: EM133360562

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