Problem on-pricing by auto dealer

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Reference no: EM131816586

Question: Pricing by Auto Dealer Many automobile dealers have an operating pattern similar to that of Austin Motors, a dealer in Texas. Each month, Austin initially aims at a unit volume quota that approximates a break-even point. Until the break-even point is reached, Austin has a policy of relatively lofty pricing, whereby the "minimum deal" must contain a sufficiently high markup to ensure a contribution to profit of no less than $400. After the break-even point is attained, Austin tends to quote lower prices for the remainder of the month. What is your opinion of this policy? As a prospective customer, how would you react to this policy?

Reference no: EM131816586

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