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 17, Problem 6MC
To determine
Calculate the difference in difference.
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Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices?
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Managerial Economics: A Problem Solving Approach
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- Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Packages Market Price Packages TR MR TC MC…arrow_forwardSeven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Parcels Market Price Parcels TR MR TC MC MR-MC…arrow_forwardWhy would consumers knowingly buy counterfeit luxurybrands?arrow_forward
- Туре of each type of subscriber website Number of Travel and Travel Cooking website cooking subscriber only only bundle 1,000 Travelers $10 $6 $16 1,000 Cooks $5 $10 $15 As shown in the table above, a company is targeting two groups of consumers-those who love to travel and those who love to cook. The company has very useful web content that it wants to market to these two groups, and it has estimated what each group would be willing to pay (their demand prices) for access to each type of content for a month. What is the best option for the company? Select one: a. Price the travel website at $5/month, the cooking website at $6/month, and sell them separately. O b. Price a bundle of the two websites at $16/month. O c. Price the travel website at $10/month, the cooking website at 10/month, and sell them separately. O d. Price a bundle of the two websites at $15/month.arrow_forwardPlease see below. Need help with both.arrow_forwardI need correct answer and do not copypaste Or plagrisum, write own wordsarrow_forward
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