Question
The manager of a newly opened store asks you to advise her on an optimal pricing scheme for specialty sandwiches, signature fountain drinks and combination
The manager of a newly opened store asks you to advise her on an optimal pricing scheme for specialty sandwiches, signature fountain drinks and combination packages of sandwiches and drinks.Market research reveals that the market size for the newly opened facility is about one million consumers of four types who can be classified as follows:
S:Have a strong preference for Wawa's signature sandwiches
F:Have a strong preference for Wawa's signature fountain drinks
SF: Like to buy sandwiches and drinks as a combination
NP: Have no preference for either product; stop in at Wawa and buy eats occasionally
Assume that the population is evenly distributed; 25% of the consumers fall into each buying group.The maximum each group will pay for the products is given in the following table.
S: 8 (sandwich); 3 (drink)
F: 4 (sandwich); 6 (drink)
SF: 8 (sandwich); 4 (drink)
NP: 3 (sandwich); 2 (drink)
Given the information above, what is the optimal sandwich price, the optimal drink price and the optimal combination price (sandwich and drink sold together)?
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