If you are a marketing specialist working for the cell phone company, refer to your answers from table 1 and select from below the group should receive the most discount and why? Students should receive the highest discount as they are the most price sensitive price elastic. Students should receive the highest discount as they are the least price sensitive or price elastic. Working adults should receive the highest discount as they are the least price sensitive or price inelastic. Working adults should receive the least discount as they are the most price sensitive group.

If you are a marketing specialist working for the cell phone company, refer to your answers from table 1 and select from below the group should receive the most discount and why? Students should receive the highest discount as they are the most price sensitive price elastic. Students should receive the highest discount as they are the least price sensitive or price elastic. Working adults should receive the highest discount as they are the least price sensitive or price inelastic. Working adults should receive the least discount as they are the most price sensitive group.

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

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 9MC

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Suppose you are a producer that sells products to two groups of buyers. These groups of buyers have no contact with one another. Group 1 has a relatively elastic demand curve and group 2 has a relatively inelastic demand curve. If your goal is to maximize total revenue you should A) charge group 1 a lower price than group 2 B) charge group 2 a lower price than group 1 C) charge both groups the same price D) increase the price to both groups
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Disney operates two theme parks in California: Disneyland and California Adventure. Disney has long charged the same price for the two parks, currently $400 per day for a four-person family. However with fewer tourists and more local visitors over the past year, Disney is considering park-specific pricing along with a “weekender” bundle. Disney media have different appeal to boys and girls, which affects demand for theme parks. Disney estimates demand for three family types: Boy (B), Girl (G) and Mixed (M). Each family buys at most one ticket of each type, and there are 1 million families of each type each month. Maximum willingness to pay for each park for each family is shown in the table below. Assume the marginal cost per family per park is $150. Family Type Disneyland (DL) CA Adventure (CA) Bundle G $700 $200 $900 M $300 $300 $600 B $200 $500 $700 Cost = $150 per family per park a. What are the profit-maximizing prices for Disneyland and California Adventure if tickets are…
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