Managerial Economics What does your company produce? What utility or benefits does it provide to the consumer? How do consumers use it?

The company is one of the top luxury carpet manufacturers in the world. The benefits provided by the luxury carpets include; elegance, class, status, comfort and durability. The primary use of luxury carpets by the consumer is for decoration of home or office interior spaces.

What is your company's history with this product or service?

Deluxe Carpets has been in the market for more than 250 years. This company is based in rural England, collects plants from all over the world and then exports a major portion of their turnover. It is the biggest market including United States.

What does the competition in the market look like for this product or service?

There is good competition in the market because some other companies offer low cost alternative products.

What actions has your company taken to remain competitive?

A company-wide change program was started. Through this program, changes were made in the organizational structure, including layoffs of managers and 15% of workforce. Fresh talented people of the industry were hired on the managerial posts in the company. To make the organization more productive, changing the attitudes and skills of the workforce...

Through this mechanism, either you bargain with customers or set prices by profiling your customers and set personalized prices for them based on previous trend (Glass, 2016). We are in luxury carpet business, and our customers are usually well-off. Due to this reason, they don't hesitate to pay for their desired item.
In order for your proposal to generate more profits, will you recommend markup or margin pricing? Why?

In markup-pricing, the firm calculates the cost of the product before adding a proportion of it as markup, therefore it will be recommended. The company decides what amount is to be marked up. Actually, prices that are set through this method cover the production-cost and maintain sufficient profit margin to enable the company achieve its target rate of return, (Boundless, 2015) that is, the percentage of profit is decided by the company.

What is the current…