Turkey Hill Motor Homes currently sells 1,200 Class A motor homes, 2,600 Class C motor homes, and 4,000 pop-up trailers each year. It is considering adding a mid-range camper and expects that if it does so the firm can sell 1,500 of them.
However, if the new camper is added, the firm expects its Class A sales to decline by 10 percent while the Class C camper sales decline to 2,100 units. The sales of pop-ups will not be affected. Class A motor homes sell for an average of $162,000 each.
Class C homes are priced at $59,500 and the pop-ups sell for $5,500 each. The new mid-range camper will sell for $32,900. What is the erosion cost?