@ Drunkard- supplier power was overestimated by the seller because he has had to cut the offer after 9 months-Posted : Sunday, October 09, 2011 9:30:03 AM.
Customer power and substitutes have been underestimated.
My post was driven by the opportunity COST @pierce is facing.Remember the car has been on sale for 9 months.If you forget about fuel and parking he faces fixed costs of approx Ksh 80,000 that is Insurance at Ksh 50,000(could be higher) and minor service of Ksh 30,000.During the year the car is depreciating.If he had taken the value hit in Oct 2011 he would have taken his money out and applied it to something different i.e. T-Bills or deposits at over 10% or maybe a better place.