Suppose a car dealership hires dealers to sell their cars. Dealers are allowed to negotiate the sales price of the cars within 5% and 10% markup above the manufacturer's suggested retail price (MSRP). The dealer is given a commission of 1.5% of the MSRP if the car sales. Meanwhile, if the dealer negotiates a price 5% above Supposing a car has MSRP of $33,700, the dealer who sells the car receives the MSRP, then the value of the markup to the dealership is For any given sold car, the dealer's commission highest markup because it would deter the sale (which results in the dealer getting nothing). with an increase in the markup, so the dealer has to charge the

Suppose a car dealership hires dealers to sell their cars. Dealers are allowed to negotiate the sales price of the cars within 5% and 10% markup above the manufacturer's suggested retail price (MSRP). The dealer is given a commission of 1.5% of the MSRP if the car sales. Meanwhile, if the dealer negotiates a price 5% above Supposing a car has MSRP of $33,700, the dealer who sells the car receives the MSRP, then the value of the markup to the dealership is For any given sold car, the dealer's commission highest markup because it would deter the sale (which results in the dealer getting nothing). with an increase in the markup, so the dealer has to charge the

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.11P

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