Sunday, September 04, 2005

GM sees big results from employee discount plan

General Motors started their employee discount campaign this summer. In an attempt to clear excess inventory General Motors decided to reduce profitability by offering models at employee rates. By decreasing the price the demand for GM vehicles increased as sales skyrocketed 16.2% in July. The marginal benefit of selling the excess number of vehicles outweighs the marginal cost of selling fewer vehicles at full profit.

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