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OG13-11 The Maxilux car company’s design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model’s image. The winning bid for supplying these tires was submitted by Rubco. Analyst concluded that the bid would only just cover Rubco’s cost on the tires, but Rubco executives claim that winning the bid will actually a profit for the company.
D When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type
Even though ppl will have to purchase the designed luxury tires when they need to replace the exactly same ones, it doesn't support that the company will make profit since no matter how many tires they sell the bid barely covers the cost.
profit = ( bid-cost =0) * quantity
profit will not rise at all in any circumstances |
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