McKee Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Atlanta. Competition among developers is fierce. The homes are a

standard model, with any upgrades added by the buyer after the sale. McKee Builders' costs per developed sublot are as follows:

View the costs.

McKee Builders would like to earn a profit of $14\%$ of the variable cost of each home sold. Similar homes offered by competing builders sell for $$200,000$ each.

Assume the company has no fixed costs.

Read the requirements.

Requirement $1.$ Which approach to pricing should McKee Builders emphasize? Why?

McKee Builders will need to emphasize a

approach to pricing because they are

This means McKee Builders will

$]$ control over pricing because the tract homes are

stiff competition.

Costs