Sunglasses manufacturer Oakley, Inc. produces high-end and low-end versions of their performance sunglasses. They estimate that the demands for their products are given by: High-end sunglasses: P 130 - 20H, and Low-end sunglasses: P- 80 - QL, where Q is measured in 1000 sunglasses, "H denotes High-end and "L" denotes Low-end Both types of sunglasses are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of sunglasses is constant at $30. Supposing that (1) the two demands are independent and () Oakley can produce and market the sunglasses such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Oakley would dharge for each version? Oakley will set price equal to marginal cost for both versions, Ie, P $30. O By the "midpoint rule", PH- $65 and PL $40. OPH $80 and PL $55. OPH- $130 and PL $80.

Sunglasses manufacturer Oakley, Inc. produces high-end and low-end versions of their performance sunglasses. They estimate that the demands for their products are given by: High-end sunglasses: P 130 - 20H, and Low-end sunglasses: P- 80 - QL, where Q is measured in 1000 sunglasses, "H denotes High-end and "L" denotes Low-end Both types of sunglasses are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of sunglasses is constant at $30. Supposing that (1) the two demands are independent and () Oakley can produce and market the sunglasses such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Oakley would dharge for each version? Oakley will set price equal to marginal cost for both versions, Ie, P $30. O By the "midpoint rule", PH- $65 and PL $40. OPH $80 and PL $55. OPH- $130 and PL $80.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 9E

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