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5. Johnny's Shop-and-Pay is a regional grocery chain, and their marketing manager is trying to determine the prot-maximizing coupon program for the store's laundry detergent
5. Johnny's Shop-and-Pay is a regional grocery chain, and their marketing manager is trying to determine the prot-maximizing coupon program for the store's laundry detergent brand. Coupon users at the store have an elasticity of demand for this product that equals -3, and the elasticity of demand for non-users of the coupon for the store brand equals -1 .5. If the ll retail (undiscounted) price of the detergent is $10 per box, what is the optimal discount to provide for coupon users? A) 25% off B) 50% off C) 75% off D) The optimal strategy is to charge the same price to both groups 6. A rm has two customers and creates a two -part tariff with a usage fee (P) that exceeds the marginal cost of production and leaves each customer with positive consumer surplus such that C52 > 081 > 0. If the rm sets the entry fee equal to CS 2, then the number of customers that actually buy the product is equal to: A) zero. B) one. C) two. D) We don't have enough information to answer this
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