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McDonald's offers french fries and cheeseburgers at any given franchise. Consider two market segments, Snack Lovers and Burger Lovers, with their willingness to pay for
McDonald's offers french fries and cheeseburgers at any given franchise. Consider two market segments, Snack Lovers and Burger Lovers, with their willingness to pay for french fries and burgers and their market shares shown in the table below. Assume a market size of 10,000 customers and a price menu consisting of two items only - french fries for $2 and cheeseburgers for $4 each. Show all your calculations in the questions below. [10] (a) What is the total revenue earned on both French fries and cheeseburgers when these are priced as indicated and sold separately? [4] (b) What would the optimal bundle price be if McDonald's offered French fries and cheeseburgers as a pure bundle? [2] Insert your answer here by overwriting this text. (c) Using the price for the pure bundle calculated in (b), what is the total revenue earned under this price structure? [2] MKTG 4161 / MKTG 6261 | Spring 2023 | Homework 2 7 (d) From an economic perspective, what is the optimal price structure for McDonald's in this scenario? Briefly explain your answer. [2]
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