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Suppose you are a manufacturer facing a market which has changed in its composition since the last time you set prices. There are two market

Suppose you are a manufacturer facing a market which has changed in its composition since the last time you set prices. There are two market segments: H and L, with reservations prices $20 and $10, respectively, for a unit of your product. The purchase frequency is 1 unit every quarter. Your variable costs are $2/unit. You sell through a large retailer whose fixed costs of doing business with you are $25/quarter

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