Question 3 (15 points) Consider a microbrewery that wants to enter the Quebec market. Total demand for micro beer in Quebec is 25 million bottles per year. Variable costs for this microbrewery include: Malt: $0.33 per bottle . Hops: $ 0.25 per bottle Yeast: $0.09 per bottle Labor: $0.15 per bottle - Packaging: $1.50 per bottle Other variable costs: $1.20 per bottle Fixed costs include: Rent and Utilities: $600,000/year Managerial Salaries: $1,200,000/year - Other operating expenses (excluding advertisement): $400,000/year The brewery is considering two alternative strategies for the launch: Strategy 1: Implement heavy advertising in order to try and sell at a higher price. Advertising = $670,000; Retail Price = $6.99 per bottle Strategy 2: Implement lower advertising, and sell at a lower price Advertising = $399,000; Retail Price = $6.29 per bottle The microbrewery expects its retailers to take a 30% margin on the selling price. Questions: #3a) For each strategy, how much market share does the company have to acquire to break even? (12 points) #3b) According to your analysis, which strategy is better? Why? (.e. briefly. Justify your answer) (3 points)