How would this information affect hondas optimal contract

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Suppose that Honda is on the verge of signing a 15 year contract with TRW to supply airbags. The terms of the contract include providing Honda with 85% of the airbags used in new automobiles. Just prior to signing the contract, a manager reads that one of TRW's competitors has introduced a comparable airbag using a new technology that reduces the cost by 30%. How would this information affect Honda's optimal contract length with TRW?

Reference no: EM13245734

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