You are a profit-maximizing firm. Suppose there are two types of customers (50% of 1 type, 50% of the other) who shop in your specialty clothing store. Consumers of type R will pay __B= $80__ for a coat and __C= $ 60__ for pants. Consumers of type S will pay __D= $60__ for a coat and __E= $ 75__ for pants. Your firm faces no competition and but it does pay for the clothing, __F=$30__ per coat and __G= $ 50__ per pair of pants, i.e. MCcoat = __F= $30__ and MCpants= __G= $ 50__. You can’t price discriminate. You offer the same prices to all your customers.Suppose instead that you only offer a bundle of one coat and one pair of pants (which we would call a suit.) What is the profit-maximizing price to charge for the suit?Answer: Price for suit = $_______

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Asked Feb 17, 2019
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You are a profit-maximizing firm. Suppose there are two types of customers (50% of 1 type, 50% of the other) who shop in your specialty clothing store. Consumers of type R will pay __B= $80__ for a coat and __C= $ 60__ for pants. Consumers of type S will pay __D= $60__ for a coat and __E= $ 75__ for pants. Your firm faces no competition and but it does pay for the clothing, __F=$30__ per coat and __G= $ 50__ per pair of pants, i.e. MCcoat = __F= $30__ and MCpants= __G= $ 50__. You can’t price discriminate. You offer the same prices to all your customers.

Suppose instead that you only offer a bundle of one coat and one pair of pants (which we would call a suit.) What is the profit-maximizing price to charge for the suit?

Answer: Price for suit = $_______

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Consumer demand theory

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