3. (10.10-20 pta) Please read the text given below and answer the questions that follow. Paradontax offering temporary price cuts at the leading retailer. Paradontax, a manufacturer of toothpaste, offers temporary price reduction at Migron, a leading grocery chain. The band is particularly known for its gum specific toothpastes which can help reverse the effects of several gum diseases. 2 (10 pts) Suppose a brand manager of Paradontax wants to measure the short-ran sales effects of temporary price reductions at Migros. To do that, the manager takes average of sales ducing promotional and non-promotional weeks in the last year and compare the averages. This practice surely leads to the over-estimation of short-term effects. Please identify what components of short-term sales lift are wrongly considered as a gain for Paradontax in this practice and provide examples for each b. (10 pts) Market research shows that a very large percentage of customers in toothpaste category is highly sensitive to price promotions. However, most of these customers do not buy Paradontax because of its relatively higher price. Paradontax, on the other hand, enjoys an extremely loyal customer base who are more quality sensitive and less promotion sensitive than competing brands customers. Based on this information, please discuss the effectiveness of temporary price reductions for Paradontax first in the short-run and then in the long-ran