Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $93 in total. Mattel is currently considering two pricing strategies: • Strategy 1: Sell each doll for $24 and each accessory for $24 • Strategy 2: Sell each doll for $3 and each accessory for $45 In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy. Strategy 1 $24 doll + $24 accessory Strategy 2 $3 doll + $45 accessory Revenue from Low-Value Customers $48 Value, 1 Accessory ($) $ The strategy that generates the most revenue is strategy Revenue from High-Value Customers $93 Value, 2 Accessories ($) $ $ Total Revenue from Strategy ($) $
Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $93 in total. Mattel is currently considering two pricing strategies: • Strategy 1: Sell each doll for $24 and each accessory for $24 • Strategy 2: Sell each doll for $3 and each accessory for $45 In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy. Strategy 1 $24 doll + $24 accessory Strategy 2 $3 doll + $45 accessory Revenue from Low-Value Customers $48 Value, 1 Accessory ($) $ The strategy that generates the most revenue is strategy Revenue from High-Value Customers $93 Value, 2 Accessories ($) $ $ Total Revenue from Strategy ($) $
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
Chapter15: Strategic Games
Section: Chapter Questions
Problem 5MC
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Question
![Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value
consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay
of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $93 in total.
Mattel is currently considering two pricing strategies:
• Strategy 1: Sell each doll for $24 and each accessory for $24
• Strategy 2: Sell each doll for $3 and each accessory for $45
In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy
is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.
Strategy 1
$24 doll + $24
accessory
Strategy 2
$3 doll + $45 accessory
Revenue from Low-Value
Customers
$48 Value, 1 Accessory
($)
$
$
The strategy that generates the most revenue is strategy
Revenue from High-Value
Customers
$93 Value, 2 Accessories
($)
$
$
Total Revenue from
Strategy
($)
$
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F397f2041-1212-4097-b8a0-c62cdf27e29e%2F49f1212a-dbf4-47d4-a1d0-3104d947c65d%2Fpmzfvmb_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value
consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay
of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $93 in total.
Mattel is currently considering two pricing strategies:
• Strategy 1: Sell each doll for $24 and each accessory for $24
• Strategy 2: Sell each doll for $3 and each accessory for $45
In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy
is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.
Strategy 1
$24 doll + $24
accessory
Strategy 2
$3 doll + $45 accessory
Revenue from Low-Value
Customers
$48 Value, 1 Accessory
($)
$
$
The strategy that generates the most revenue is strategy
Revenue from High-Value
Customers
$93 Value, 2 Accessories
($)
$
$
Total Revenue from
Strategy
($)
$
$
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