Country C stopped its production of penny and it does not make any big impact as it cost only 1.6¢ to produce whereas the Country U cost 99% of zinc core for the copper plate. In recnt year, Country U lost almost $60 million in minting the pennies. Country C asked its citizens to bring all the unwanted pennies to melt or to give it for donation to charities. As the price of Zinc rises people feel they need to eliminate the pennies to save the cost of manufacturing. On the other side some feels that if the price is rounded to nearest nickel, poor people will suffer the most. Others say the price will attain stickiness and some says that 99¢ may reduce to 95¢ rather than $1 to avoid the crossing that higher price threshold. Characters in the case: Country C Country U To discuss: The effects on retail price if Country U withdraws the circulation of penny.

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Chapter 19, Problem 1C

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Case summary:

Country C stopped its production of penny and it does not make any big impact as it cost only 1.6¢ to produce whereas the Country U cost 99% of zinc core for the copper plate. In recnt year, Country U lost almost $60 million in minting the pennies.

Country C asked its citizens to bring all the unwanted pennies to melt or to give it for donation to charities.

As the price of Zinc rises people feel they need to eliminate the pennies to save the cost of manufacturing. On the other side some feels that if the price is rounded to nearest nickel, poor people will suffer the most. Others say the price will attain stickiness and some says that 99¢ may reduce to 95¢ rather than $1 to avoid the crossing that higher price threshold.

Characters in the case:

Country C

Country U

To discuss: The effects on retail price if Country U withdraws the circulation of penny.

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