Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 14, Problem 14.2IP
To determine
The effects of offering a monthly subscription service for multiple purchasers.
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14-2. German brothels recently began offering a monthly subscription service for multiple purchasers. If you wished to reduce the incidence of prostitution, would you consider this pricing plan to be a desirable change?
The marginal cost pricing model calculates a markup over marginal costs using estimates of the price elasticity of demand. Will any other pricing strategy result in higher profits?
If your marketing department estimates that the semiannual demand for the highlander is q=150,000. - 1.5 P, what price should you charge in order to maximize revenues from the sales of highlander
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Managerial Economics: A Problem Solving Approach
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- The price elasticity of demand for air travel differs radically from first-class (1.3) to unrestricted coach (1.4) to restricted discount coach (1.9). What do these elasticities mean for optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120?arrow_forwardIf 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?arrow_forwardDiscuss at least 1 pricing practice that is illegal or unethicalarrow_forward
- Identify nine common pricing methods.arrow_forwardAn international airline in Ghana ,Emirates ,estimates that the price elasticity of demand for business who travellers weekdays is -3,while that for vacation travellers who travel on weekends is -5 .if the aim of the airline is to maximise profit what pricing strategy will you recommend to the airline and why?arrow_forwardWhy is price stability difficult to achieve inonline and global marketing?arrow_forward
- 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_forwardNestle baby formula is known for causing illness and infant deaths in poor communities in third world countries by promoting their infant formula products at the expense of breastfeeding. They have provided unethical marketing practices. Promotional campaigns of multinational corporations (MNCs) have exacerbated the problem of controlling the use of this potentially dangerous product by luring the consumer into the market.arrow_forwardWhy would a healthcare manager ever want to price discriminate?arrow_forward
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