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You run a wine shop that sells two types of wine. For simplicity, we will describe the wines as either Cheap Expensive. You know that

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You run a wine shop that sells two types of wine. For simplicity, we will describe the wines as either Cheap Expensive. You know that some of your customers are Wine-snobs who love expensive wine, whereas other customers are Typical people who have a hard time telling the different between cheap and expensves wines Assume there are equal numbers of each kind of customer and both types of wine cost $5 to produce. a. Suppose your customers value wine as follows: Wine Variety Cheap Expensive Customer Type Typical $10 $15 Wine-Snob $20 $40 If your restaurant could use first-degree price discrimination, what wine prices maximize profit? Which type of customer buys each type of wine? b. Suppose your customers value wine as follows: Wine Variety Cheap Expensive Customer Type Typical $10 $15 Wine-Snob $20 $40 If your restaurant could use second-degree price discrimination, what wine prices maximize profit? Which type of customer buys each type of wine

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