Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. (5 points) The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase

image text in transcribed
2. (5 points) The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer's inverse demand for your bran muffins is now P = 8 - 1.5Q. If your cost of producing bran muffins is C(Q) = 0.5Q (MC = 0.5), determine the optimal number of bran muffins to sell in a single package and the optimal package price. Please show all calculations and give any necessary explanation. 3. (5 points) A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has not variable production cost. The firm has determined that there are three type of consumers for its products Laptop Printer Bundle (Laptop + printer) Customer type A $800 $100 $900 Customer type B $1,000 $50 $1,050 Customer type C $600 $150 $750 To simplify the analysis, you may assume that there is one customer of each type. (a) If the firm were to charge only individual prices and not the bundle price, what price should it charge for its laptops and what price should it charge for its printers in order to maximize revenue? Assume that the firm has one customer of each type. Please explain. (b) If the laptop and printer are bundled together, what price will the firm charge for the bundle in order to maximize revenue? Assume that only the bundle is sold and the laptop and printer are not available separately. Please explain. (c) Assume that the laptop and the printer are bundled together, and the laptop is available separately for $600 and the printer is available separately for $100. What will the bundle price now be in order to maximize revenue? Please explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Marketing

Authors: Philip R Cateora

14th Edition

0073380989, 9780073380988

More Books

Students also viewed these Economics questions

Question

2. I try to be as logical as possible

Answered: 1 week ago