Asked by Brisa Sanchez on Jul 18, 2024
Verified
Explain the price equation in the context of a new car purchase.
Price Equation
A formula representing the determinants of the price of a good or service, including production costs, competition, demand, and supply.
- Acquire knowledge on and apply the techniques for price determination, including pinpointing the aims and barriers associated with pricing.
Verified Answer
SA
Salma ArmentaJul 22, 2024
Final Answer :
The price equation is: Final price = List price − (Incentives + Allowances) + Extra fees. The final price of a car = List price − (Rebates, Cash discounts, Old car trade-in) + (Finance charges, Special accessories, Destination charges, Taxes, Title, etc.). See Figure 13-1.
Learning Objectives
- Acquire knowledge on and apply the techniques for price determination, including pinpointing the aims and barriers associated with pricing.
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