Selling price above the contribution margin
Problem:
Many believe that any selling price above the contribution margin will add to the wealth of the firm. This being the case, is there a danger in the decision rule that states "always accept any offer that has a positive contribution margin?"
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In addition, they must also consider legal issues. Describe the influence that the law has on pricing decisions.
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Problem: Many believe that any selling price above the contribution margin will add to the wealth of the firm.
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The demand for full-fare seats is equally likely to be any number between 26 and 30. How many seats should be protected for full-fare sales?
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