Suppose that a sales force has found 20 qualified buyers and has begun the sales process. The sales manager estimates that 10% eventually proceeds to make a purchase. Assume that a professional company offers three services, priced at $2,000, $7,000 and $20,000, respectively. Based on past results or the sales manager’s estimates, you project that 60% of first-time buyers will choose the cheapest option, 30% will choose the middle option and 10% will choose the most expensive option. a. Calculate the size of a likely sale for any prospect that makes a purchase.

Suppose that a sales force has found 20 qualified buyers and has begun the sales process. The sales manager estimates that 10% eventually proceeds to make a purchase. Assume that a professional company offers three services, priced at $2,000, $7,000 and $20,000, respectively. Based on past results or the sales manager’s estimates, you project that 60% of first-time buyers will choose the cheapest option, 30% will choose the middle option and 10% will choose the most expensive option. a. Calculate the size of a likely sale for any prospect that makes a purchase.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 17.1IP

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