Would it be better to price the canoes at a lower introductory price and then raise the price later, or charge a higher introductory price and then lower it later (if necessary). In other words, would you be more inclined to error on the high or low side when determining a price?

        In order to determine the introductory price it would be appropriate to evaluate the number of order that should be sell to achieve breakeven. If Davidson is going to charge low price from its customers than it will have to sell higher number of units to achieve break even. On the other hand if Davidson charge high price from its customer than it would have to sell lower number of units to achieve breakeven. It can be seen that the market is competitive therefore setting low price might affect the profitability of the business. It is suggested to charge $3500 because corporation can make 12 canoes to achieve break even and through organization can achieve significant amount of profit.