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At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (ie, she cannot price-discriminate). Coffee Banana Students with Early Classes Students without Early Classes 72 51 62 101 The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. then the student will purchase the item At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). Coffee Banana Students with Early Classes Students without Early Classes 62 101 72 51 The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item i or bundle.. For simplicity, assume there is just one student with an early class, and one student without an early class. Price Strategy 1. Mixed Bundling 2. Price Separately 3. Bundle Only Pricing strategy Revenue from Pricing Strategy $ $ S Cost from Pricing Strategy Profit from Pricing Strategy $ S $ yields the highest profit for the cafe owner. $ $ Price Strate 1. Mixed Bund 2. Price Separa 3. Bundle Or Pricing strategy 3 2 1 Revenue from Pricing Strategy $ $ $ Cost from Pricing Strategy Profit from Pricing Strategy $ $ $ yields the highest profit for the café owner. $ At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (ie, she cannot price-discriminate). Coffee Banana Students with Early Classes Students without Early Classes 72 51 62 101 The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. then the student will purchase the item At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). Coffee Banana Students with Early Classes Students without Early Classes 62 101 72 51 The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 163, or just a coffee for 72. 2. Price separately: Offer coffee at 62, price a banana at 101. 3. Bundle only: Coffee and a banana for 123. Do not offer goods separately. Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item i or bundle.. For simplicity, assume there is just one student with an early class, and one student without an early class. Price Strategy 1. Mixed Bundling 2. Price Separately 3. Bundle Only Pricing strategy Revenue from Pricing Strategy $ $ S Cost from Pricing Strategy Profit from Pricing Strategy $ S $ yields the highest profit for the cafe owner. $ $ Price Strate 1. Mixed Bund 2. Price Separa 3. Bundle Or Pricing strategy 3 2 1 Revenue from Pricing Strategy $ $ $ Cost from Pricing Strategy Profit from Pricing Strategy $ $ $ yields the highest profit for the café owner. $
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Related Book For
Managerial Economics A Problem Solving Approach
ISBN: 978-1133951483
3rd edition
Authors: Luke M. Froeb, Brian T. McCann, Mikhael Shor, Michael R. War
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