Problem 1 The chain-ratio method for estimating total market demand uses three variables: a) number of prospective buyers b) quantity purchased by an average buyer per year 0) price of an average unit (retail) Market demand can be determined as follows: Q=nqup where Q = total market demand 12 = number of buyers in the market q = quantity purchased by an average buyer per year p = price of an average unit Manufacturer Fixed Costs $ 12,000,00000 Manufacturer Variable costs $ 15.00 Manufacturers Unit Contribution $ 5.00 Wholesaler Margin 25% Retailer Markup (markup approach) 30% Company Output Capacity 10,000,000 Discount/interest rate 10% Average monthly purchases 1 Number of buyers in the market 3,400,000 Average years of buying 3 99.0575 Calculate the retail price of the product. Calculate Firm Breakeven Breakeven market share Prot Impact Breakeven to Generate $1,200,000 prot Breakeven to Generate 10% prot on xed investment Calculate average customer lifetime value and Customer Equity Total market demand dollars per year Total market demand units per year