If the price match policy is a good idea, how widely should it be advertised? Explain. You woke up this morning to a troubling advertisement on TV: A+ Rental Cars' local competitor is discounting their economy rentals. After doing a little digging, you discover that your competitor has launched an aggressive advertising campaign, reducing the price on their economy line from $32.99 to $24.99. Based on your knowledge of previous pricing practices, you expect a similar price reduction across all vehicle types

You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your "No Haggle" sales policy. Last year, your dealership earned record profits of $1.3 million. In your market, you compete against two other dealers, and the market- level price elasticity of demand for midsized Honda automobiles is -1.5. In each of the last five years, your dealership has sold more midsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 20 percent off the manufacturer's suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is $12,000. What price should you charge for a midsized automobile if you expect to maintain your record sales? Instructions: Enter your response rounded to two decimal places. $

Suppose Bang Bang is the only local swimming pool. She believes that there are 10 potential customers. Each of them has an identical demand function of QI = 250 – 0.02P, with QI as the unit of services of each customer. She operates with a constant variable cost of $500 per unit of service. If Bang Bang can practice a two-part tariff with a membership arrangement, suggest the optimal pricing strategy. Show your calculations

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Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p=200-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $. (Enter your response as a whole number.)

You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. SC has two types of potential customers of equal number-10 businesses and 10 academic institutions. Each business customer has the demand function Q = 10 - P, where Q is in millions of seconds per month; each academic institution has the demand Q = 8-P. The marginal cost to SC of additional computing is 2 cents per second, regardless of volume. a. Suppose that you could separate business and academic customers. What rental fee and usage fee would you charge each group? What would be your profits? b. Suppose you were unable to keep the two types of customers separate and charged a zero rental fee. What usage fee would maximize your profits? What would be your profits? c. Suppose you set up one two-part tariff-that is, you set one rental and one usage fee that both business…

A buyer for a retail store negotiates discounts of 30%, 15%, and 5% (taken successively) on a certain mattress. If the mattress has in initial price of $984, what price will the buyer actually pay after the discounts are applied? (Round to the nearest cent.)

Your firm is considering entering a new territory. From market research, you have obtained the following demand function that explains how your price (P in dollars) and advertising (A in thousands of dollars) choices influence the quantity demanded (Q in thousands of units). Q = 20 - 6P + 2A To enter the new market you plan on running $10,000 worth of ads. The marginal cost of producing your product is $1 per unit. 3a) What is your profit maximizing price, quantity sold, and profit?

Suppose a firm faces an identical inverse demand curve of p = 100 - q for each consumer in the market. Currently, the firm's average cost = marginal cost = $40. Determine the profit-maximizing price and identical lump-sum fee to charge with a two-part tariff. The profit-maximizing price to charge is $ (Enter a numeric response using a real number rounded to two decimal places.)

Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p = 140-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $40, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p = 120-2q. The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's original…