As manager of an A+ Rental Cars franchise, your responsibilities include setting prices to achieve organizational goals.

Part 1:

Previously you determined the revenue-maximizing price based on your demand equation.Is maximizing revenue the most appropriate objective for A+ Rental Cars?Explain.If not, recommend an alternative approach and justify your stance. We did NOT determine a revenue-maximizing price base

The accounting department at the corporate office has provided you with some historical cost data.Economy rentals cost $17.10 per day while luxury vehicles cost $25.12 per day.Regardless of vehicle type, a rental contract requires $8.90 for reconditioning.Additional vehicles can be delivered from the regional hub at a cost of $35/vehicle, on top of the costs above.Do you have any concerns about using this accounting data to set prices?Hint: Consider the difference between average and marginal cost.

In addition to answering the questions above, provide pricing recommendations for economy vehicles for the next four weeks.