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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
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%
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