Grant Company and Lee Company Compete in the Same Market

question 137

Essay

Grant Company and Lee Company compete in the same market.The following budgeted income statements illustrate their cost structures.
$\begin{array}{lrr}&\text { Grant } & \text { Lee } \\&\text { Company } & \text { Company }\\ \text { Number of customers } & 200 & 200 \\\text { Sales revenue }(200 \times \$ 150) & \$ 30,000& \$ 30,000 \\\text { Less variable costs } & 6,000& 18,000\\\text { Contribution margin } & \$ 24,000 & \$ 12,000 \\\text { Less fixed costs } & 19,000 & 7,000 \\\text { Net income } & \$ 5,00 0& \$ 5,000\end{array}$
Required:
(a)If Grant Company lowers its price to $135,it will lure 80 customers away from Lee Company.Prepare Grant's income statement based on 280 customers.
(b)If Lee Company lowers its price to $135 (assuming that Grant Company is still charging $150 per customer),Lee would lure 80 customers away from Grant.Prepare Lee's income statement based on 280 customers.
(c)Which of the companies would benefit more from lowering its sales price to attract more customers,and why?

Understand the genetic basis for differing behaviors within a species.

Comprehend how altruistic behavior can evolve through inclusive fitness and kin selection.

Differentiate between innate and learned behaviors in animals.

Recognize the importance of communication signals in animal behavior.

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Definitions:

Enslaver

A person or entity that holds individuals in slavery, depriving them of their freedom.

Free Blacks

African Americans who were not enslaved and enjoyed a degree of citizenship rights, including property ownership and labor freedom, primarily before the Civil War.

British Emancipation

The process culminating in the abolition of slavery throughout the British Empire in 1833, with the Slavery Abolition Act.

Caribbean

A region consisting of the Caribbean Sea, its islands (including the West Indies), and the surrounding coasts, noted for its unique cultural, geological, and historical significance.