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You are the VP of marketing for a bicycle manufacturer. Up through last year, you sold...

You are the VP of marketing for a bicycle manufacturer. Up through last year, you sold only one bike model: the Spirit. Last year you sold 2,200 units of the Spirit. This year, you introduced a new model, the Pacer, and sold 1,200 units. The estimated cannibalization rate for the Spirit is 30%.

  1. How units of the Spirit were cannibalized by the Pacer?




  1. How many units sold of the Pacer were NOT a result of cannibalization?

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Answer #1

Cannibalization rate = 30%

This means 30% of the volume of the Spirit was taken by the new product Pacer

So, 2200*30% = 660 units of the Spirit were cannibalized by the Pacer.

Therefore, 1200 - 660 = 540 units sold of the Pacer were not a result of cannibalization.

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