Mary purchased 4 tires by mail order. She paid $57.60 per tire plus $4.30 per tire for shipping and handling. There is no sales tax, because the tires were purchased out of state. She also had to pay $7.58 per tire for mounting and balancing. At a local store, Mary's total for the 4 tires with mounting and balancing would be $320 plus 6% sales tax. How much did Mary save by purchasing the tires through the mail?

Mary saved $61 by purchasing the tires through the mail  

Solution:

Total for the 4 tires by mail order  

                          = 4 x (57.60 + 4.30 + 7.58)  

                          = 277.92

She paid $ 57.60 per tire

She paid $ 4.30 per tire for shipping and handling

She paid $ 7.58 including tax, per tire for mounting and balancing.  

6% sales tax

At a local tire store, her total for the 4 tires  

= $ 320 + 6% x 320

= 339.2

∴ 339.2 - 277.92= 61.28 ≈ $61

Mary saved $61 by purchasing the tires through the mail  

answer; rapid growth in buyer demand and high buyer switching cost;

answer$225.00;