Answer:
<u>Part a</u>
Incremental Sales = New Sale - Lost sales of Actual Pizza
Incremental Sales = 21,000,000 - (40% × 21,000,000)
Incremental Sales = $ 12,600,000
Thus the incremental sales connected in introducing of the new pizza is $12.6 Million.
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<u>Part b</u>
Incremental Sales = New Sale - Lost Sales from Customer switching Brand
Incremental Sales = 21,000,000 - [42% × (40%) × (21,000,000)
Incremental Sales = 21,000,000 - 3528000
Incremental Sales = $17,472,000
Therefore, the incremental sales linked to introduce the new brand pizza in case (b) is $17.472 Million.
