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'l Homework 2 Home Insert Draw Design Layout References Malllngs Review View 9 Tell me la Share 9 Comments F9" on): Times New. Vi: 12 v A A Aa v A0 AaBchDdEe AaBchD AthCchEe AatheDdEe AaEchDdEs AaBb AaBchDd-R ) I V page B I U v ab x x2 A v p v v Emphasis Heading1 Normal Strong Subtitle Title No Spacing Styles Dictate 6 _ 2 Pane Managerial Economics 7 Homework 2 PART II: PRICING AND OPTIMIZATION - Real-World case, November 1010 (7 points) In November 2020, I had a discussion with a two business executives, Jeff and Lisa (disguised names) The debate was about what to do to prices when fixed costs increase due to COVE)- 19 measures (for example, the installation of acrylic omce partition screens, purchase of hand sanitizers and the like) Je's arglunent was that these costs must be passed on to consumers Lisa argued to the contrary. She said that an increase in these costs should not lead companies to change prices as that neither affects marginal cost nor marginal revenue, at least if the intia.l price was the prot- maximizing one, A few days later, Jeff sent me an -ai1 with a hypothetical tahle (which I have literally copy. pasted) that proved that an increase in xed cost should impact the optimal price, + Starting situation Situation Bl: Situation BI: A no price change price increase Fixed cost 100 110 110 Variable cost 10 10 10 Price 12 12 13 Volume 1000 1000 900 Revenues 11000 12000 11700 Total cost 10100 10110 9120 Total pro!\" 1900 1880 2580 08. Who is right? Jeff or Lisa? (3 points) 09. Depending on your answer to Question 8, answer either of the following questions (4 points): Case 1: If Jeff is right, what message would you send to Lisa (using Jeff's data) to show her that her conclusion is incorrect? Be very precise and to the point (no long essay) Case 2: If Lisa is right, what message would you send to Jeff (using his own data) to show him that his conclusion is incorrect? Be very precise andto the point (no long essay). Page 30f 5 102 of 856 words [B English (United States) El Focus u 5% - U + 103%