MAR231 – MBTN #2
INSTRUCTIONS: Complete the following problems based on your review and understanding of
Appendix 3 in the textbook. Show ALL WORK and calculation steps in order to get full credit. You may
type or hand write the assignment then upload it in Blackboard by the due date.
Determine the market potential for a product that has 35 million prospective buyers who
purchase an average of 3 per year and $38.50 price averages. How many units must a company
sell if it desires a 15% share of this market?
Number of prospective buyers (n) = 35,000,000
Quantity purchased per buyer (q) = 3
Price per unit (p) = $38.50
Market potential (Q) = n*q*p = $4,042,500,000
In order to obtain 10% of the market, the company must sell 15,750,000 units (15% of total consumption
which is n*q = 105,000,000).
Reliant Chairs sells designer seating to consumers through retail outlets. Total industry sales for
the market last year were $128 million, with Reliant’s sales representing 6.5% of that total.
