Bundle: Contemporary Marketing, Loose-Leaf Version, 17th + LMS Integrated MindTapV2.0 Contemporary Marketing, 1 term (6 months) Printed Access Card
17th Edition
ISBN: 9781337493819
Author: BOONE, Louis E., Kurtz, David L.
Publisher: Cengage Learning
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Chapter 19, Problem 2C
Summary Introduction
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: Whether elimination of nickel is recommendable since the cost is more than 9¢ to produce and distribute and the effects of the recommendation on prices.
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