Imagine a high-end golf ball manufacturer sells their premium golf balls to retailers at $34.50 per pack of dozen balls. Their current sales are 9 million packs of dozen balls, representing 20% share of the total market by units. The company is about to introduce a lower quality, "basic" version of their golf balls to be price at $21.00 per pack of dozen balls to retailers. The company's total variable costs for the premium balls are $13 and for the basic balls are $9. The retailers' profit margins are $7 for the premium balls and $4 for the basic balls. The company expects that the line of basic balls will take about 1.24 million packs of sales from the premium balls. 

What is the company's expected loss due to cannibalization? Please provide your numerical answer below.

Answer rating: 100% (QA)

To calculate the companys expected loss due to cannibalization we need t... View the full answer