Refer to the Article Summary. What happens to the profit a car company makes on each car sold if it offers incentives such as discounts, cash rebates, or lease incentives to customers? How might a car company decide which of these strategies to use

What will be an ideal response?

Offering cash rebates, discounts, or lease incentives will each decrease profits. Offering any of these incentives will, effectively, increase the average total cost for the company. In deciding which of these strategies to use, the firms will probably assess consumer demand to see which approach consumers prefer.