You are the manager of a firm that produces products Xand Yat zero cost. You know that different types of consumers value your two products differently, but you are unable to identify these consumers individually at the time of the sale. In particular, you know there are three types of consumers (1,000 of each type) with the following valuations for the two products: Consumer Туpe Product X Product Y $ 90 $ 60 2 70 140 40 160 a. What are your firm's profits if you charge $40 for product X and $60 for product Y? (Instructions: Assume all customers purchase each product.) $ b. What are your profits if you charge $90 for product X and $160 for product Y? c. What are your profits if you charge $150 for a bundle containing one unit of product X and one unit of product Y? $ 450 d. What are your firm's profits if you charge $210 for a bundle containing one unit of X and one unit of Y, but also sell the products individually at a price of $90 for product X and $160 for product Y? $ 450

You are the manager of a firm that produces products Xand Yat zero cost. You know that different types of consumers value your two products differently, but you are unable to identify these consumers individually at the time of the sale. In particular, you know there are three types of consumers (1,000 of each type) with the following valuations for the two products: Consumer Туpe Product X Product Y $ 90 $ 60 2 70 140 40 160 a. What are your firm's profits if you charge $40 for product X and $60 for product Y? (Instructions: Assume all customers purchase each product.) $ b. What are your profits if you charge $90 for product X and $160 for product Y? c. What are your profits if you charge $150 for a bundle containing one unit of product X and one unit of product Y? $ 450 d. What are your firm's profits if you charge $210 for a bundle containing one unit of X and one unit of Y, but also sell the products individually at a price of $90 for product X and $160 for product Y? $ 450

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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