Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q2-Q3. Price $1.00 10/week $2.00 $150 $150 A coffee store has researched its market and identied two market segments 1 and 2. Using surveys, for

image text in transcribed
Q2-Q3. Price $1.00 10/week $2.00 $150 $150 A coffee store has researched its market and identied two market segments 1 and 2. Using surveys, for each segment, the store learned weekly average demand per consumer at four different price levels ($1, $1.5, $2, and $2.5). For example, on average, a consumer in segment 1 will buy 8 cups/week at $1 price/cup. Assume that segments 1 and 2 include 100 and 200 consumers, respectively. Assume that the marginal costs are $0.50/cup. Q2 (2130. Suppose that the store considers charging one of the four price levels in the table. What are the maximum prots/week? (A) $2000 (B) $2100 (C) $2200 (D) $2300 Q3 (3130. The store considers using the following weekly loyalty cards. For example, with Loyalty Card 1, the store sells the rst cup at $2.5, the second cup at $2.0, . . ., and offers the tenth cup for free. Find a better loyalty card. Then, calculate how much it increases the prots/week compared to those obtained from the optimal single price in Q2. (A) 22% (B) 24% (C) 26% (D) 28%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing management

Authors: Philip Kotler, Kevin Lane Keller

14th Edition

9780273753360, 132102927, 273753363, 978-0132102926

More Books

Students also viewed these Marketing questions

Question

What is the coefficient for 2014?

Answered: 1 week ago