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For their high-end model, Weber Gas Grills finds they face price elasticity of demand of -1.5 for showroom sales at bricks-and-mortar retail channel partners. If incremental delivery costs to Weber for freight shipping direct to the stores = $32, if the retail partners receive a floorspace allowance plus assembly fee = $19, and if the direct costs of goods sold include: component inputs = $80 and piecerate manufacturing labor = $28,
A. What will be the optimal price, the dollar margin, the percentage mark-up and (percentage) margin of this Weber gas grill. Show your work.
B. If Weber is concerned right now about inventory overhang and decides to increases unit sales by 30%, what percentage discount should they offer?
C. What price will that be?
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