A manufacturer of exercise equipment sets a suggested price to the consumer of $395 for a piece of equipment to be competitive with similar equipment. The manufacturer sells its equipment to a sporting goods wholesaler who receives a trade discount of 25 percent of the wholesale price and a retailer who receives a trade discount of 50 percent of the retail selling price.
(a) What demand-oriented pricing approach is being used?
(b) At what price will the manufacturer sell the equipment to the wholesaler? (show calculations)