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Pisa? Pizza, a seller of frozen? pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of the new pizza will be $23 million per year. While many of these sales will be to new? customers, Pisa Pizza estimates that 39% will come from customers who switch to the? new, healthier pizza instead of buying the original version.
Problem a. Assume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new? pizza?
Problem b. Suppose that 59% of the customers who will switch from Pisa? Pizza's original pizza to its healthier pizza will switch to another brand if Pisa Pizza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this? case?
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