What is the dollar value

Question

Acme sells $389,865 of the $987,000 of dynamite in the Arizona market. Acme's average retail price is $4.75, which is 6.4% higher than the total Arizona market ARP. What is the dollar value of Acme's opportunity gap if their goal is to have 42.0% share?

Answer 1

The dollar value of an opportunity gap is defined as the incremental value if market share increases to a desired percentage..

Acme's goal is to have a 42% market share of the $987,000 market for dynamite which is

$987,000 x .42 = $414,540.. Since it currently has $389,865 in sales, it's opportunity gap is

$414,540 - $389,865 = $24,675