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Your firm manufactures coffee makers. You have recently run some marketing research to assess the benefit obtained by customers for the low quality and
Your firm manufactures coffee makers. You have recently run some marketing research to assess the benefit obtained by customers for the low quality and high quality models you produce. Assume that you are a monopolist in this market. The market research you obtained is summarized in the table below. Segment Info Size 40 20 Group A B Benefit (in Dollars) Low High 16 10 4 7 From this research, you know the number of people in each group (size) and the benefit (in dollars) they attribute to each product. Assume that everyone in a particular group will behave the same way. The cost to make a Low Quality Coffee Maker is $1 per unit. The cost to make a High Quality Coffee Maker is $3 per unit. 2a) What is the maximum profit obtained and price if you only offer a Low Quality Coffee Maker? What is the maximum profit obtained and price if you only offer a High Quality Coffee Maker?
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