The regular air fare between Boston and San Francisco is 419. An airline using planes on this route observes that they fly with an average of 236 passengers. Market research tells the airlines’ managers that each $7 fare reduction would attract, on average, 3 more passengers for each flight. How should they set the fare to maximize their revenue?
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The regular air fare between Boston and San Francisco is 419. An airline using planes on this route observes that they fly with an average of 236 passengers.
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- Assume you are appointed head of the U.S. Department of Homeland Security in charge of preventing illegal crossings along a section of the U.S.-Mexico border. You have a weekly budget of $16,000. As a department head, you get satisfaction (or "utility") from preventing illegal border crossings and you have at your disposal two methods for preventing illegal crossings: 1) Hiring border security personnel to patrol strategic points along the border at a cost of $1000 per week per person or, 2) Purchase surveillance drones to patrol the border at a weekly cost of $3000 per drone. Based on the data attached in the picture below, explain whether you agree or disagree with the following statement made by a subordinate: "Based on the data, the department's "utility" is highest if we employ 16 security personnel because drones are just too expensive."In economics, customer sorting rules are often applied to understand how customers choose among various options based on their preferences and the available information. Which of the following best describes a common customer sorting rule? A. Price Maximization Rule B. Utility Maximization Rule C. Information Aversion Rule D. Brand Loyalty Rule Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote. Take care of plagiarism. Answer completely.Someone who pays $800 to fly from one city to another instead of paying only $100 for a bus trip between the two cities is making an irrational choice and is thus not maximizing his utility. O True O False Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Parcels Market Price Parcels TR MR TC MC MR-MC…Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Packages Market Price Packages TR MR TC MC…Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? Combined Parcels & PackagesPrice Parcels and Packages TR MR TC MC MR-MC…
- The term "BOGO" ("Buy One Get One", also referred to as "Buy One Get One Free") has entered the urban dictionary, and is a sales tactic whereby sellers offer buyers a second unit of the item free if they pay full price for the first unit. A variation of BOGO occurs when stores offer a "Buy One Get One Half Off" sales promotion. Why do you think consumers respond to the "Buy One Get One Half Off" sales promotion and what principle of economics does this behavior reflect?Joe's search costs are $5 per search. He wants to buy a smart watch for his wife for Christmas, and the lowest price he's found so far is $300. Joe thinks 80 percent of the stores charge $300 for smart watches and 20 percent charge $200. Joe's optimal decision is to Multiple Choice continue to search for a lower price since the expected benefit of an additional search is $20, which exceeds his per-unit search costs. continue to search for a lower price since the expected benefit of an additional search is $80, which exceeds his per-unit search costs. stop searching and purchase a video player for $300. continue to search for a lower price since the expected benefit of an additional search is $100, which exceeds his per-unit search costs.A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the elasticity of demand for coupon users is -5 and the elasticity of demand for non-coupon users is -2, then in order to maximize profit, what should the value of the coupon (in dollars) be? Group of answer choices: 1) 0.50 2) 0.75 3) 1.00 4) 1.50