Heavy Duty Inc

question 58

Multiple Choice

Heavy Duty Inc. ,a manufacturer of power tools,decides to offer a rebate of $100 on its 16-inch mid-range chain saw,which currently has a retail price $470.Heavy Duty's marketers estimate that,as a result of the rebate,sales of this model will increase from 50,000 to 80,000 units next year.The profit margin for Heavy Duty before the rebate is $150.Based on the given information,is the decision to give the rebate a wise one?

• A)No,since costs are $5.0 million more than benefits.
• B)No,since costs are $3.5 million more than benefits.
• C)Yes,since the benefits are $0.2 million more than the costs.
• D)Yes,since the benefits are $1.5 million more than the costs.

Comprehend the importance of well-defined property rights in facilitating market transactions.

Recognize the conditions under which market failures occur and their impact on surplus.

Understand the prevalence and nature of postpartum blues and its distinctions from other postnatal psychological disorders.

Recognize the global occurrence of postpartum adjustment issues and debunk misconceptions.

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, where each has negligible influence on the market price of homogeneous products.

U.S. Airline Industry

A sector that encompasses all airlines operating within the United States, including domestic and international carriers.

Agricultural Markets

Marketplaces where agricultural products, including crops and livestock, are bought and sold, often influenced by seasonal cycles and global demand.

Arbitrage

Practice of buying at a low price at one location and selling at a higher price in another.