7) Candice wants to sell two types of chocolate bars, Dark (D) and White (W) to three consumers: A, B, and C. Each consumer's reservation price for each bar is given in the figure below. Candice purchases each bar at a cost of 1. Candice considers practicing either pure or mixed bundling. What is the maximum profits Candice can earn? Dark White 3 ABC 0 3 2 0 2

7) Candice wants to sell two types of chocolate bars, Dark (D) and White (W) to three consumers: A, B, and C. Each consumer's reservation price for each bar is given in the figure below. Candice purchases each bar at a cost of 1. Candice considers practicing either pure or mixed bundling. What is the maximum profits Candice can earn? Dark White 3 ABC 0 3 2 0 2

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 13P

See similar textbooks

Similar questions

1. Hertz and other car rental companies charge much more to rent luxury cars such as Ferraris andBentleys than to rent compact cars such as the Toyota Yaris or Chevrolet Sonic. Is this pricediscrimination? Explain 2. A Grocery store issued frequent-buyer cards to willing customers and collected information about their purchases. How should a manager use this information to offer customized discount coupons to individuals?
Suppose a perfectly competitive market for hotdog stands in New York City becomes monopolistically competitive when gourmet, discount, andethnic hot-dog retailers show up, making eachcart slightly different. If hot dogs from differentstands are now imperfect substitutes and there arenumerous carts in the city, compare the producerand consumer surplus and total social welfarebefore and after the change
The following table presents the valuations that 5 different consumers have for 2 different products. The production costs are $10 per unit of good A and $10 per unit of good B. The firm producing them can choose to price them independently or using a bundling strategy. What is the profit the firm will realize, if it prices optimally? VALUATIONS Product A Product B Consumer 1 5 95 Consumer 2 10 90 Consumer 3 50 50 Consumer 4 80 20 Consumer 5 95 5 ANSWER SHOULD BE 410. I will like if it is right! showing my support. Thank you.
Gliberace's Fashion Accessories of Las Vegas produces gem-stone encrusted formal wear for sale in Los Angeles and San Francisco subject to total cost TC = 100 + 5(QLA + QSF). Demand for Gliberace's stones in the two cities is given by QLA = 70 - 2PLA and QSF = 55 - PSF. If Gliberace price discriminates between the two cities, what will its maximum profits be? $975 $750 $825 $1,175 $1,075
8 . Individual Problems 14-6 At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). Students with Early Classes Students without Early Classes Coffee 70 60 Banana 51 101 The marginal cost of coffee is 10 and the marginal cost of a banana is 40. The café owner is considering three pricing strategies: 1. Mixed bundling: Price bundle of coffee and a banana for 161, or just a coffee for 70. 2. Price separately: Offer coffee at 60, price a banana at 101. 3. Bundle only: Coffee and a banana for 121. Do not offer goods separately. Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. For simplicity, assume there is just one student…
3.- (From problem 5.3 in the textbook) A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demands: • Under 25: qr = 18 − 5p • Over 25: q = 10 − 2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $2 each. (c) If the nightclub cannot charge according to whether the customer is a student or not, but can set a (common) cover charge and a (common) price per drink (which we assume equal to $2), what two-part tariff will it choose? (d) If the nightclub can set a separate cover charge and price per drink for each group, what two-part pricing schemes will it choose?
#4. If network externalities exist in an industry, the ________ firm to enter the market is often the one that succeeds in dominating the industry. a. first b. second c. third d. fourth e. fifth
1 Assume there are two firms in a Hoteling Linear city. One firm is located at zero and the other at one. Assume the following utility equations: U0=v−p−tx+μ, U1=v−pn−t(1−x). Where U0 is utility from buying the good from the firm located at zero, p is the price for the firm at point zero, t is the travel cost and μ is bonus utility because the firm at point zero makes people a little bit happier. U1 is utility from buying the good from the firm at point one and pn is the price. Part a) Find the indifferent consumer
H1. The following table presents the valuations that 5 different consumers have for 2 different products. The production costs are $10 per unit of good A and $10 per unit of good B. The firm producing them can choose to price them independently or use a bundling strategy. What is the profit the firm will realize if it prices optimally?
GameZone, a video games store, is considering the best way to price two new games – a first-person shooter (FPS) and a racing game. There are four types of consumers that might buy the games with roughly equal numbers of each type, and their willingness to pay (WTP) for each game is detailed in the table below (assume that the willingness-to-pay for a second game of the same type is zero). How should Gamezone price the two games separately to maximise revenue? How should Gamezone price a bundle of both games to maximise revenue? Is there an alternative (involving bundling) that generates more revenue than either single prices or a bundle alone? Under what condition/s is bundling likely to increase profits for a firm? Consumer Type WTP for FPS game WTP for racing game A $120 $70 B $70 $120 C $160 $10 D $10 $160
Q)Suppose the inverse demand curve for rides in an amusement park is P=136.3-4.7Q, and the marginal cost for offering a ride is 0. Suppose the customers pay an entrance fee and can take as many rides as they want without paying extra money for each ride. What is the optimal entrance fee? Select one: a. 9288.85 b. 1976.35 c. 3952.70 d. 4644.42
Consider a town in which only two residents, Eric and Ginny, own wells that produce water safe for drinking. Eric and Ginny can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Note: the second picture of the last blank has 4 option A. nash equilibrium B tying c resale price maintenance D predatory pricing