Marketing

1. suppose the average price for a new disposable cell phone is $20, and the total market potential for that product is $4 million. topco, inc. has a planned market share of 10 percent. how many phones does topco have the potential to sell in this market?

20,000

2. use the data from question 3 to calculate topco, inc.'s planned market share in dollars.

$400,000

3. atlantic car rental charges $29.95 per day to rent a mid-size automobile. pacific car rental, atlantic's main competitor, just reduced prices on all its car rentals. in response, atlantic reduced its prices by 5 percent. now how much does it cost to rent a mid-size automobile from atlantic?

$28.45

1. ANSWER: 20,000

2. ANSWER: $400,000

3. ANSWER: $28.45

Explanation:

1. If the average price for a new disposable cell phone is $20, and the total market potential for that product is $4 million;and Topco, Inc. has a planned market share of 10 percent. Then, Topco have the potential to sell in this market 10% * $4 million / $20 = 20,000 units of the proposed cell phone.

2. The planned market share in dollars is 10% * $4 million = $400,000

3. If Atlantic Car Rental charges $29.95 per day to rent a mid-size automobile. Pacific Car Rental, Atlantic's main competitor, just reduced prices on all its car rentals. In response, Atlantic reduced its prices by 5 percent.

Now Atlantic's new cost of rental for mid-size cars is: 95% of $29.95 =  $28.45

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