This document discusses pricing strategies for Beauregard Textile company's Triaxx-30 product. It considers announcing a price of $3 or $4 per yard and analyzes the impact on total contribution and on the competitor Calhoun and Pritchard, who may be showing a loss at $3 and could raise their own prices. Dropping Beauregard's price could negatively impact Calhoun and Pritchard, so alternative strategies are discussed to encourage price increases without antitrust issues.

1. Beauregard Textile What price should Beauregard Textile company announce for Triaxx-30? $3.00 or $4.00 per yard? • What is the total contribution under the present arrangement? What happens if the price were dropped to $3? • Calhoun and Pritchard is presumable showing a loss at $3.00. Why don’t they raise their prices? • What happens to Calhoun and Pritchard if Beauregard drops prices? • How can Beauregard get C&P to raise prices without violating any antitrust regulations?