Smith Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Atlanta. Land and labor are cheap, and competition among developers is fierce. The homes are a standard model, with any upgrades added by the buyer after the sale. Smith Builders' costs per developed sublot are as follows:

$($Click the icon to view the costs.$)$

Smith 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 $$204,000$ each. Assume the company has no fixed costs.

Read the requirements.

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

Smith Builders will need to emphasize a $$ approach to pricing because they are $$ This means Smith will $$ control over pricing because the tract homes are stiff competition.