You are producing two complimentary products (A and B). It costs $1 to make Product A, $2 to make Product B, and $3 to make the bundle. After some marketing research is conducted, you have the following information about the benefit (in dollars) of your products and size (number of people) for each segment. Customer Perceived Benefit Size Segment A +B A B A 10 1 10 11 20 4 9. 13 30 6. 14 D 20 8 15 10 8. 4 12

You are producing two complimentary products (A and B). It costs $1 to make Product A, $2 to make Product B, and $3 to make the bundle. After some marketing research is conducted, you have the following information about the benefit (in dollars) of your products and size (number of people) for each segment. Customer Perceived Benefit Size Segment A +B A B A 10 1 10 11 20 4 9. 13 30 6. 14 D 20 8 15 10 8. 4 12

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

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.4IP

See similar textbooks

Similar questions

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
To test the effectiveness of a two Web advertising agencies, you increase your ad purchase with agency A by 50% without changing your purchase through agency B. The referrals to your website from agency A increased by only 34% but the referrals from agency B fell by 21%. Why might the difference-in-difference estimate of the referrals per dollar through agency A be biased?
You are a developer that has just finished writing a new game and would like to publish it with this platform’s store. You do not expect to incur in any more costs developing the product. The app store typically keeps 20% of your revenue but, in order to give an incentive to sellers, the app store will only charge 15% of revenue to successful apps selling more than 60,000 units a year, and 10% to top-selling apps with more than 85,000 units sold. Assume that there are no extra (in-game) charges beyond the price to acquire the game. Using the data in the table below, at what price should you sell your game at? (Don't forget to take into account elasticity) Quantity Price Total Revenue To Store Revenue Elasticity 96261.14 $ 0.99 $ 95,298.53 10% $ 85,768.67 -0.11 85920.32 $ 1.99 $ 170,981.43 10% $ 153,883.29 -0.24 75579.50 $ 2.99 $ 225,982.70 15% $ 192,085.29 -0.41 65238.68 $ 3.99 $ 260,302.33 15% $…
The Kalamazoo Brewing Company (KBC) currently sells its microbrews in a seven-state area: Illinois, Indiana,Michigan, Minnesota, Mississippi, Ohio, and Wisconsin. The company’s data analytics department has collecteddata from its distributors in each state. This data consists of the quantity of cases and price (per case) ofmicrobrews sold in each state, as well as the average income (in thousands of dollars) of consumers living invarious regions of each state. The data for each state are available in the Excel file on Brightspace--please notethere are multiple tabs at the bottom of the spreadsheet, each refers to one of the seven states selling theKalamazoo Brewing Company’s microbrews. You will use the data to estimate the linear demand function fortheir microbrews in Indiana. To do this, perform the regression analysis in Excel for the data provided forIndiana.a. Write out the estimated linear demand function for microbrews in Indiana as a function of the price percase (P) and…
Asking people to directly indicate their economic values in a survey is an example of what type of economic valuation? Question 14Select one: a. Travel cost models b. Contingent valuation c. Hedonic pricing d. Defensive expenditures e. Replacement cost methods
A clothing store and a jeweler are located side by side in a shopping mall. If the clothing store spend C dollars on advertising and the jeweler spends J dollars on advertising, then the profits of the clothing store will be (36 + J )C - 2C 2 and the profits of the jeweler will be (30 + C )J - 2J 2. The clothing store gets to choose its amount of advertising first, knowing that the jeweler will find out how much the clothing store advertised before deciding how much to spend. The amount spent by the clothing store will be Group of answer choices $17. $34. $51. $8.50. $25.50.
A new tropical fruit juice product was entering the marketplace. The director of marketing for the company would like to know which advantage should be emphasized in advertisements, and which advertisement is better for sales. Nine cities with similar demographics are chosen, and a different combination of Media and Marketing Strategy is tried. The unit sales of tropical fruit juice for the eight weeks are shown in the two-way table below. Media Marketing strategy Convenience Quality Price Television 492, 630, 559, 447, 480, 624, 547, 444 464, 559, 759, 558, 528, 670, 534, 657 678, 628, 591, 633, 684, 761, 691, 549 Social Media 464, 559, 759, 558, 528, 670, 534, 657 710, 650, 705, 653, 577, 837, 629, 799 705, 585, 527, 499, 515, 566, 710, 547 Newspaper 690, 650, 705, 653, 577, 825, 629, 799 577, 616, 708, 486, 480, 652, 585, 538 803, 583, 825, 597, 813, 564, 708, 615 At the 0.05 level of significance, is there an interaction…
Youngstown-Warren Regional Airport (YNG) has had a difficult time securing passenger service from a commercial airline. a.) A few years ago, the Port Authority offered an incentive to United with guaranteed revenue equal to approximately $1.5 million, but United declined saying it was not sufficient. Suppose United anticipated that it would cost $1 million to offer flights from Youngstown, so with a guaranteed revenue of $1.5 million, their anticipated profit would equal $500,000. Given that they still chose to decline offering service from YNG, what do you know must be true? Put this in terms of implicit costs and economic profit. b.) In 2019, YNG’s only commercial carrier, Allegiant Air stopped offering service from YNG, despite the fact that it was known to be profitable. Allegiant Air’s service from YNG was known to be profitable. Why would Allegiant Air pull service from YNG even if it had been their service from YNG had been generating a profit? Note, Allegiant started…
Correctly explains all three subparts
The residential division of Prism’s high-speed Internet service uses one advertising agency, while its commercial division uses another. Two analysts, Andy and Brad, are asked to test and evaluate the effectiveness of the two agencies. Andy proposes an A/B test that compares the click-through rates per ad for the two agencies. Brad proposes a difference-in-dif-ference test in which the budgets for both agencies are increased by 50%, and the percent change in click-through rates is compared. What might be the sources of selection bias for the two proposals? Which is likely to be smaller?
Item24 Item 24 Item 24 A firm sells two goods (X and Y) that are related in consumption. The estimated demand and cost conditions are: PX = 20 − 0.1QX − 0.05QY PY = 70 − 0.3QY − 0.1QX MCX = 1 + 0.1QX MCY = 2 + 0.25QY What are the profit-maximizing prices for the two goods? Multiple Choice PX = $25.60, PY = $20.50 PX = $30, PY = $35 PX = $50, PY = $45 PX = $11.20, PY = $42.70
Please answer 2 and 3. 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer 3. If Jackie wanted to determine whether to produce more product in her company, she would do so if Group of answer choices a. Marginal revenue exceeded average cost b. Marginal cost was greater than marginal revenue c. Average cost exceeded marginal cost d. Marginal revenue was greater than marginal cost Thank you!.