Aaron Nathan and Alexis Roberts are thinking about launching a new e-commerce
business. They firmly believe that 30% of the people who try their product at the full price will
buy two additional units at their planned 25% discount for follow-up purchases. It is unlikely
anyone will buy one additional unit(as they’d have to pay full price) orthree additional units (as
most people need at most three totalunits).
Suppose theirfixedcosts are $390,000, sellingprice is $40 perunit, andvariable costs
are $20 per unit.
a. How many customers do they need to break even?
b. What profit do they make if 20,000 people try their product?
c. Howsensitive isyourprofitprojectionin(b)tothe assumptionthat 30%willbuytwo
d. Suppose a 50% discount for follow-on purchases causes a dramatic increase inthe
percentage ofpeople who buy two additionalunits. How dramatic would ithave to be for
this to be a good idea
The post Aaron Nathan and Alexis Roberts are thinking about launching a new e-commerce business. appeared first on Lion Essays.
Writing quality papers is a TOP priority. One expert takes one order at a time.
The service package includes topic brainstorm, research, drafting, proofreading, plagiarism check, citation formatting, and revisions.
We appreciate how valuable your time is. Hence, we make sure all custom papers are 100% original and delivered within the agreed time frameRead more
Each paper is written from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
We see it as our duty to follow all instruction the client provides. If you feel the completed paper does not meet your exact requirements, we will revise the paper if you let us know about the problem within 14 business days from the date of delivery.Read more
Your email is safe, we use your personal data for legal purposes only and in accordance with personal data protection law. Your payment details are also secure, as we use only reliable payment systems.Read more
You can easily contact us with any question or issues you need to be addressed. Also, you have the opportunity to communicate directly with assigned writer, e-mail us, submit revision requests, chat with us online, or call our toll-free on our site. We are always available to our customers.Read more