Does anyone know of a model that explains any or all of the following features of the new car market? Which ones would you have predicted based on economic theory?
- MSRP (manufacturer suggested retail price, where does this number come from and what's its purpose?) - dealer holdbacks (a fixed percentage that the manufacturer returns to the dealer for every car sold) - manufacturer-to-dealer incentives - manufacturer-to-customer rebates - laws against manufacturers selling directly to consumers - negotiation on most prices, but also some one-price dealers (e.g. Saturn dealers)
