MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
9th Edition
ISBN: 9781259896422
Author: Baye
Publisher: MCG
Question
Book Icon
Chapter 11, Problem 13PAA
To determine

The optimal price strategy.

Blurred answer
Students have asked these similar questions
You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost of $25,000 (your wholesale supplier would not let you purchase the skis and bindings separately, nor would it let you purchase fewer than 60 sets). The community in which your store is located consists of many different types of skiers, ranging from advanced to beginners. From experience, you know that different skiers value skis and bindings differently. However, you cannot profitably price discriminate because you cannot prevent resale. There are about 20 advanced skiers who value skis at $400 and ski bindings at $275; 20 intermediate skiers who value skis at $300 and ski bindings at $400; and 20 beginning skiers who value skis at $200 and ski bindings at $350. Determine your optimal pricing strategy.
You have decided to start a snow-plowing business whereby you will offer to plow the driveways of your neighbours' homes after heavy snowfalls. You are well known by everybody in your neighbourhood, you have a plow for the front of your truck, and you think that your neighbours would rather hire you than someone they do not know. From your research, you know that homeowners are charged an average of $40 to plow their driveways after a heavy snowfall. Interestingly, a few years ago, your research tells you that homeowners were charged an average of $25 to plow their driveways after a heavy snowfall. The average price has gone up, which excites you. Apply your learning about supply and demand to this fact pattern to analyze possible reasons for the increase in price. Consider the five factors that may impact demand and the 6 factors that may impact supply. What questions do you want answered before committing to this business?
Your friend bought two tickets to see James Taylor play at the Save-On Center, but now her partner can’t make it. You knew about the concert, but you decided you’re not a big enough fan to pay $100 for a ticket. On the other hand, she would have bought tickets even if they cost $150 each. If you assume that she cannot sell the ticket anywhere else, what is the minimum price you can offer her for the ticket that she will accept? Explain your answer.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning