Question

Honda Motor Company is considering offering a

$ 2 comma 000

rebate on its​ minivan, lowering the​ vehicle's price from

$ 29 comma 300

to

$ 27 comma 300

.

The marketing group estimates that this rebate will increase sales over the next year from

41 comma 500

to

56 comma 500

vehicles. Suppose​ Honda's profit margin with the rebate is

$ 5 comma 820

per vehicle. If the change in sales is the only consequence of this​ decision, what are its costs and​ benefits? Is it a good​ idea?​ Hint: View this question in terms of incremental profits.

The cost of the rebate will be

​$nothing

million. ​(Round to one decimal​ place.)