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Deep Clean, Inc., provides deep cleaning services for retail locations that have been exposed to virus-infected individuals. They have three types of potential customers: Type
Deep Clean, Inc., provides deep cleaning services for retail locations that have been exposed to virus-infected individuals. They have three types of potential customers: Type 1: Businesses serving individuals who are not at risk and that can maintain 6-foot distance Type 2: Businesses serving individuals who are not at risk, but that cannot maintain 6-foot distance Type 3: Businesses serving at-risk individuals Deep Clean's services come in three distinct versions: - " Basic" : surface-level cleaning with normal cleaners " Intense" : surface-level cleaning with medical-grade cleaners " Extreme" : deep cleaning with medical-grade cleaners For the purposes of these questions, assume that Deep Clean's costs are zero. The marginal willingness to pay for the different customer types is given in the following table: Basic Upgrade to Upgrade to Intense Extreme Group Sizes Type 3 50 25 20 5 Type 2 40 10 5 6 Type 1 20 5 0 14. Deep Clean is aware of all the MWTP data and group size data in the table above, but cannot condition its prices directly on a customer's type, i.e., it has to offer the full menu to all customers. What menu should Deep Clean offer to maximize its revenue? As usual, assume that any customer who is indifferent between more than one option chooses the option that the seller prefers and that each customer can purchase only one option. Which of the following is the optimal menu of prices? (If a service is not listed in the menu, then it is not offered.) Price for " Basic" : $20 A. Price for " Intense" : $45 Price for " Extreme" : $65 Price for " Basic" : $40 B. Price for " Extreme" : $85 Price for " Basic" : $40 C. Price for " Intense" : $60 Price for " Extreme" : $85 Price for " Basic" : $20 D. Price for " Extreme" : $85 E. None of other choices is the optimal menu of prices
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