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A manufacturer of exercise equipment sets a suggested price to the consumer of $395 for a piece of equipment to be competitive with similar equipment. The manufacturer sells its equipment to a sporting goods wholesaler who receives a trade discount of 25 percent of the wholesale price and a retailer who receives a trade discount of 50 percent of the retail selling price.

(a) What demand-oriented pricing approach is being used?

(b) At what price will the manufacturer sell the equipment to the wholesaler? (show calculations)

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