A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $78 and one with auto-defrost at $141, while women value a simple microwave at $63 and one with auto-defrost at $78.Suppose the manufacturer is considering three pricing strategies:1.Market a single microwave, with auto-defrost, at $78, to both men and women.2.Market a single microwave, with auto-defrost, at $141, to only men.3.Market a simple microwave to women, at $63. Market a microwave, with auto-defrost, to men at $125. For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.Use the following table to indicate the revenue from men, the revenue from women, and the total revenue from each strategy.StrategyRevenue from MenRevenue from WomenTotal Revenue from Strategy1. Auto-Defrost Microwave only at $782. Auto-Defrost Microwave only at $1413. Simple Microwave at $63, Auto-Defrost Microwave at $125 Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this means that there are two men, and no women.Under these conditions, pricing strategy would maximize revenue for the manufacturer. A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is littleadditional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, themanufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $78 and onewith auto-defrost at $141, while women value a simple microwave at $63 and one with auto-defrost at $78.Suppose the manufacturer is considering three pricing strategies:1. Market a single microwave, with auto-defrost, at $78, to both men and women.2. Market a single microwave, with auto-defrost, at $141, to only men.3. Market a simple microwave to women, at $63. Market a microwave, with auto-defrost, to men at $125.For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, theindividual will purchase the microwave.Use the following table to indicate the revenue from men, the revenue from women, and the total revenue from each strategy.Revenue fromMenStrategy1. Auto-Defrost Microwave only at $782. Auto-Defrost Microwave only at $1413. Simple Microwave at $63, Auto-Defrost Microwave at $125$$$Revenue fromWomen$$$Total Revenue fromStrategy$$$Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume thismeans that there are two men, and no women.

Total revenue is the sum of money a company brings in from selling its products and services. In…

A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto- defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $78 and one with auto-defrost at $141, while women value a simple microwave at $63 and one with auto-defrost at $78. Suppose the manufacturer is considering three pricing strategies: 1. Market a single microwave, with auto-defrost, at $78, to both men and women. 2. Market a single microwave, with auto-defrost, at $141, to only men. 3. Market a simple microwave to women, at $63. Market a microwave, with auto-defrost, to men at $125. For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave. Use the following table to indicate the revenue from men, the revenue from women, and the total revenue from each strategy. Revenue from Men Revenue from Women Strategy 1. Auto-Defrost Microwave only at $78 2. Auto-Defrost Microwave only at $141 3. Simple Microwave at $63, Auto-Defrost Microwave at $125 $ $ $ $ $ $ Total Revenue from Strategy $ $ $ Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this that there are two mon and no wo

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 16.6IP

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A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $78 and one with auto-defrost at $141, while women value a simple microwave at $63 and one with auto-defrost at $78.

Suppose the manufacturer is considering three pricing strategies:

1.	Market a single microwave, with auto-defrost, at $78, to both men and women.
2.	Market a single microwave, with auto-defrost, at $141, to only men.
3.	Market a simple microwave to women, at $63. Market a microwave, with auto-defrost, to men at $125.

For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

Use the following table to indicate the revenue from men, the revenue from women, and the total revenue from each strategy.

Strategy	Revenue from Men	Revenue from Women	Total Revenue from Strategy
1. Auto-Defrost Microwave only at $78	2. Auto-Defrost Microwave only at $141 3. Simple Microwave at $63, Auto-Defrost Microwave at $125 Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this means that there are two men, and no women. Under these conditions, pricing strategy would maximize revenue for the manufacturer.

A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-
defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little
additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the
manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $78 and one
with auto-defrost at $141, while women value a simple microwave at $63 and one with auto-defrost at $78.
Suppose the manufacturer is considering three pricing strategies:
1. Market a single microwave, with auto-defrost, at $78, to both men and women.
2. Market a single microwave, with auto-defrost, at $141, to only men.
3. Market a simple microwave to women, at $63. Market a microwave, with auto-defrost, to men at $125.
For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the
individual will purchase the microwave.
Use the following table to indicate the revenue from men, the revenue from women, and the total revenue from each strategy.
Revenue from
Men
Strategy
1. Auto-Defrost Microwave only at $78
2. Auto-Defrost Microwave only at $141
3. Simple Microwave at $63, Auto-Defrost Microwave at $125
$
$
$
Revenue from
Women
$
$
$
Total Revenue from
Strategy
$
$
$
Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this
means that there are two men, and no women.

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