Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 8, Problem 17PAA
To determine
To explain:Whether 100000 PCs offer to be accepted or not.
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You are the manager of medium-sized company that assembles personal computers in Ghana. You purchased most components such as random access memory (RAM), which is an input for your personal computers, on a competitive market. Based on your marketing research, consumers view personal computers in the Ghanaian market as a normal good. One morning, you picked up a copy of the Graphic Business, published by the Graphic Communications Group limited, and read an article indicating that the price of RAM have been increased effective the next day, forcing manufacturers to produce computers at a high unit cost. In addition, the article indicated that consumer incomes are expected to fall over the next two years as the economy dips into recession. Explain your answer with an appropriate diagram, how these events would affect the equilibrium price and quantity.
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…
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?
Combined Parcels & PackagesPrice Parcels and Packages TR MR TC MC MR-MC…
Chapter 8 Solutions
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