A small gasoline station manager observes that while

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124. A small gasoline station manager observes that while gasoline sales have been steady, the service side of her business has fallen off and mechanics are often idle. She decides to offer a promotion-an oil change for $10 with a coupon mailed to 800 households in a 2-mile radius from her station. The $10 will just cover the costs of the oil change and the cost of printing and mailing is $1000. She hopes the promotion will increase regular maintenance service calls, whose average price is $40. (Average materials and labor costs per job is $30.) How many additional maintenance service jobs must result for the promotion to break even? (Disregard opportunity costs, goodwill effects and any additional revenues.) - 37 -
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Chapter 14: Marketing
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