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Suppose that you work at honda who is on the verge of

Question - Suppose that you work at Honda who is on the verge of signing a 15-year contract with TRW to supply airbags. The term of the contract include providing Honda with 85 percent of the airbags used in new automobiles. Just prior to signing the contract, you read that one of TRW's competitors has introduced a comparable airbag using new technology that reduces the cost by 30%. How would this information affect Honda's optimal contract length with TRW?

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