A chocolate manufacturer can produce normal or gourmet chocolate bars at a per-unit cost of 1 for normal bars and 3 for gourmet bars.. There are two types of chocolate consumers in the market, light consumers of chocolate (a share 0<<10

Assume the chocolate manufacturer can price discriminate and maximises expected per-customer profits. Also assume that consumer payoffs equal willingness to pay minus price paid, that a consumer buys at most one chocolate bar, and that a consumer who does not buy any chocolate gets a payoff of 0.

Wherever rounding is needed, please round to 3 decimal points.

a) If the chocolate manufacturer chooses the optimal separating menu, what price would he set for a normal bar?

Answer for part 1

b) If the chocolate manufacturer chooses the optimal separating menu, what price would he set for a gourmet bar?

Answer for part 2

c) If the proportion of light chocolate consumers is less than ____, the chocolate manufacturer would choose an exclusion menu rather than a separating menu (fill in the blank).