Question
Duff Beer Mr. Smithers has just been appointed as the new division manager for Duff Beer. Mr. Smithers believes that there is an opportunity to
Duff Beer Mr. Smithers has just been appointed as the new division manager for Duff Beer. Mr. Smithers believes that there is an opportunity to expand the profitability of Duff by offering "double cases"that is, instead of just offering the standard 24-can case, Duff can offer a 24-can case and a 48-can case. Fortunately for Smithers, Duff Beer is not very costly to make; it costs only $2 per case to make (and so it costs $4 to make a double case).
Demand for Duff Beer Duff Beer is quite popular, and demand is quite high. The demand by consumers for a first case of Duff is given by 24 p, where p is the price of a case. Meanwhile, some consumers demand a second case of Duff; the demand for a second case is given by 24 2p.
If you do not sell double cases, what price will you charge per case? _______ If you do sell double cases, what prices will you charge for single and double cases? ________ Are profits higher? Why? ___________
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