What price should be charged for a midsized automobile

Reference no: EM13243045

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. However, according to the local Chamber of Commerce, your earnings were 10 percent less than either of your competitors. In your market, the price elasticity of demand for mid-sized honda automobiles is -4.5. In each of the last 5 years, your dealership has sold more mid-sized automobiles than any other honda dealership in the nation. This entitled your dealership to an additional 30 percent off the manufacturer's suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is $11,000. What price should you charge for a midsized automobile if you expect to maintain your record sales?

Reference no: EM13243045

Questions Cloud

Explain why the policies might at first succeed : Suppose the government misjudges the natural rate of unemployment to be much lower than it actually is, and thus undertakes expansionary fiscal and monetary policies to try to achieve the lower rate.

What is a balanced budget rule for the federal government : what is a balanced budget rule for the federal government what are the economic consequences of it (EXPLAIN) Should a candidate for a national office support such a rule

Find the magnitude of the magnetic flux : At a certain location, the Earth's magnetic field has a magnitude of 5.8×10?5T, Find the magnitude of the magnetic flux through the top of a desk at this location that measures 140cm by 90

Find the average magnitude of the induced emf : An emf is induced in a conducting loop of wire 1.14m long as its shape is changed from square to circular, Find the average magnitude of the induced emf if the change in shape occurs in 4.23s

What price should be charged for a midsized automobile : 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.

What average force does the molecule exert on the wall : The average speed of a nitrogen molecule in air is about 6.70 ? 102 m/s, and its mass is about 4.68 ? 10-26 kg, What average force does the molecule exert on the wall

Determine the optimal pricing strategy and explain it : You recently read a report indicating that about 80 percent of all tourists visit Florida during the winter months in any given year, and that 60 percent of all tourists traveling to Florida by air rent automobiles.

What are the fractions of muscle and fat in the leg : It's possible to estimate the percentage of fat in the body by measuring the resistance of the upper leg rather than the upper arm, What are the fractions of muscle and fat in the leg

Compute the price elasticity of demand for carrots measured : The market for carrots is comprised of two segments: fresh market carrots, which have excellent, uniform color and a small core, and processing carrots, which are larger than fresh market carrots but still have good flavor

User Account

All Pages