D7 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 $1.7 million. In your market, you compete against two other dealers, and the market-level price elasticity of demand for midsized Honda automobiles is -1.8. In each of the last five years, your dealership has sold moremidsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 25 percent off themanufacturer's suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is$11,000.What price should you charge for a midsized automobile if you expect to maintain your record sales?Instructions: Enter your response rounded to two decimal places.$ 15750

In this question, we have to compute the record of sales.

Answered: suggested retail price (MSRP) in each

Business

Accounting

suggested retail price (MSRP) in each

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

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 $1.7 million. In your market, you compete against two other dealers, and the market-
level price elasticity of demand for midsized Honda automobiles is -1.8. In each of the last five years, your dealership has sold more
midsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 25 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?
Instructions: Enter your response rounded to two decimal places.
$ 15750

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