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Business, 13.07.2021 18:30 Joustian

Erosion costs. Fat Tire Bicycle Company currently sells 40 comma 000 bicycles per year. The current bike is a standard​ balloon-tire bike selling for ​$100 ​, with a production and shipping cost of ​$25 . The company is thinking of introducing an​ off-road bike with a projected selling price of ​$375 and a production and shipping cost of ​$275 . The projected annual sales for the​ off-road bike are 16 comma 000 . The company will lose sales in​ fat-tire bikes of 8 comma 500 units per year if it introduces the new​ bike, however. What is the erosion cost from the new​ bike? Should Fat Tire start producing the​ off-road bike?

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Erosion costs. Fat Tire Bicycle Company currently sells 40 comma 000 bicycles per year. The current...
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