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Problem 2. Hair salon versioning. A local hair salon in New Haven is re-designing its business plan. The owner has discovered that they can make
Problem 2. Hair salon versioning. A local hair salon in New Haven is re-designing its business plan. The owner has discovered that they can make more money by offering two packages: \"Deluxe" and \"Basic". There are two types of customers: Type A customers usually only need to get haircuts, while Type B customers would enjoy other services (wash, conditioning, coloring, ironing, etc.). Suppose that there are 4 type A customers for each type B customer. The reservations values for each type and marginal costs for each version are as follows: TpeA 4 Basic MC=20 Deluxe MC=50 The optimal menu has the form of: Get the basic package for 1),; dollars, or get the deluxe package for 10,) dollars. a) What are the constraints that will bind under this menu? b] Use the answers in part a], find the prices p3 and pp. c) What is the hair salon's profit by offering this menu? (:1) What is the hair salon's profit if it only serves type B by offering the deluxe package only
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