What level of incremental sales is associated with introducing the new pizza in this case?
September 16, 2022
What level of incremental sales is associated withintroducing the new pizza in this case?Pisa Pizza, a seller of frozen pizza, is considering introducinga healthier version of its pizza that will be low in cholesteroland contain no trans fats. The firm expects that sales of the newpizza will be $20 million per year. While many of these sales willbe to new customers, Pisa Pizza estimates that 40% will come fromcustomers who switch to the new, healthier pizza instead of buyingthe original version.a. Assume customers will spend the sameamount on either version. What level of incremental sales isassociated with introducing the new pizza?b. Suppose that 50% of the customers whowill switch from Pisa PizzaÂ’s original pizza to its healthier pizzawill switch to another brand if Pisa Pizza does not introduce ahealthier pizza. What level of incremental sales is associated withintroducing the new pizza in this case?
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