Question

Tide laundry detergent is a well known brand that sells for approximately $8.00 for a 64 ounce bottle, and Procter & Gamble usually sells 2 million of these sizes each year. An average private label store brand costs $6.00 for the same size, and typically 1 million are sold each year. What is Tide’s revenue premium?

Answer 1

Answer:

Tide’s revenue premium = $10 million

Explanation:

Tide’s revenue premium is the difference in revenue between Procter & Gamble and the other brand.

Procter & Gamble: Revenue = $8.00 x 2 million = $16 million

Other brand: Revenue = $6.00 x 1 million = $6 million

Tide's revenue premium = $16 million - $6 million = $10 million

Hope this helps!