Tutorial $1$

Consider a retailer considering a $33\%$ off sale on blenders currently priced at $$54.$ The retailer pays $$29$ per blender from manufacturer.

a$.$ what is the initial contribution margin

b$.$ what is the proposed sales price and the percent change in price captured per unit sold?

c$.$ What is the volume hurdle that must be achieved for sale on blenders alone?

d$.$ Suppose that instead of having this sale, a young pricing expert suggested that the price of blenders be increased to $$59.$ What would be the allowable loss in the sales of blenders that would still leave the retailer in a more profitable position?