MYECON LAB W/PEARSON ETEXT MICROECON>IP
9th Edition
ISBN: 9780134153988
Author: PINDYCK
Publisher: PEARSON
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Question
Chapter 11, Problem 6RQ
To determine
The practice of charging higher prices for the luxury cars in the market.
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Check out a sample textbook solutionStudents have asked these similar questions
What is the Difference between predatory pricing, tie-in sales, and bundling?
At what Price should All Firms Produce at?
What should a Firm do for Pricing if it faces Elastic or Inelastic Demand?
GameZone, a video games store, is considering the best way to price two new games – a first-person shooter (FPS) and a racing game. There are four types of consumers that might buy the games with roughly equal numbers of each type, and their willingness to pay (WTP) for each game is detailed in the table below (assume that the willingness-to-pay for a second game of the same type is zero). How should Gamezone price the two games separately to maximise revenue? How should Gamezone price a bundle of both games to maximise revenue? Is there an alternative (involving bundling) that generates more revenue than either single prices or a bundle alone? Under what condition/s is bundling likely to increase profits for a firm?
Consumer Type
WTP for FPS game
WTP for racing game
A
$120
$70
B
$70
$120
C
$160
$10
D
$10
$160
If price discrimination is the option to implement within the context of elasticity of demand, what pricing policy should be implemented in each market to raise total revenue?
Chapter 11 Solutions
MYECON LAB W/PEARSON ETEXT MICROECON>IP
Ch. 11.A - Prob. 3ECh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQ
Ch. 11 - Prob. 10RQCh. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17E
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Similar questions
- In reference to the chart, calculate and explain in detail what the maximum revenue is for an individual pricing policy, and what the maximum total revenue would be if pure bundling was employed.arrow_forwardIdentify nine common pricing methods.arrow_forward• Provide an example of price discrimination from your own experience or from your work. Is this an example of first-degree, second-degree, or third degree price discrimination? • Describe the conditions that allow the firm to price discriminate in your example. • How does this practice affect the firm and its consumers?arrow_forward
- Caroline and Frances are debating the pricing strategy of several airlines. Caroline argues, “When airlines restrict discounted tickets to people who book well in advance and stay over on a Saturday, it is not price discrimination, because the restrictions have nothing to do with individual buyers' willingness to pay.” However, Frances says, “The airlines' stay-over restrictions are a form of price discrimination, because they roughly split the market into two separate groups that are willing to pay two different amounts.” Economists generally agree with who?arrow_forwardQ3) How is peak-load pricing a form of price discrimination? Can it make consumers better off? Give anexample.arrow_forwardwhat is the following pricing strategy or price discrimination approach? the olympic commission offers different soccer ticket prices depending on seat location within the stadium (closer or further away from the pitch, behind the goalkeeper, halfway line, etc). B.Peak Load Pricing A.Bundling C.Indirect Segmentation Price Discrimination D.Complete Price Discrimination E.Direct Segmentation Price Discriminationarrow_forward
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