WEEK 5 PROBLEM SET worth 200 points.
You conciliate suggest your defenses in a Blackboard impost filling out charts and correspondent the essays/short defense questions. Note: There is not an liberty to upimpute your assignment, you must use the Blackboard impost; at-last, you conciliate be serviceserviceable to vision and paste your defenses from a Word instrument.
Problem 1: Using the Ultimate Approach
Suppose your concourse runs a shuttle employment of a public-house to and from the persomal airport. The consumes for incongruous customer imputes are: 1 customer: $30 2 customers: $32 3 customers: $35 4 customers: $38 5 customers: $42 6 customers: $48 7 customers: $57 8 customers: $68.
1. What are your ultimate consumes for each customer impute roll? (Chart) 2. If you are possessed $10 per ride, what customer impute would you appropriate? (Essay)
Problem 2: Elasticity and Pricing
Suppose the reckon of firms you emulate delay has of-late increased. You estimated that as a remainder of the increased emulation, the insist modifiableity has increased from –2 to –3, i.e., you countenance further modifiable insist. You are currently charging $10 for your work. What is the value that you should commit, if insist modifiableity is -3?
Problem 3: Value Discrimination
An specialty limit, whose customer set is made up of two markets, adults and progeny, has patent clear insist schedules as follows:
Quantity Adults Progeny 5 15 20 6 14 18 7 13 16 8 12 14 9 11 12 10 10 10 11 9 8 12 8 6 13 7 4 14 6 2
The ultimate unreserved consume of each separate of size is $5. Because ultimate consume is a trustworthy, so is middle variserviceable consume. Ignore unroving consumes. The owners of the specialty separate absence to maximize returns.
Calculate the value, size, and advantage if: 1. The specialty limit commits a incongruous value for adults. (Chart) 2. The specialty limit commits a incongruous value for progeny. (Chart) 3. The specialty limit commits the similar value in the two markets thoroughly. (Chart) 4. Explain the dissimilarity in the advantage realized lower the two situations. (Essay)
Problem 4: Bundling
Time Warner could propose the History Medium (H) and Showtime (S) individually or as a parcel of twain. Suppose the transgression values of customers 1 and 2 (the first values they are conciliateing to pay) are presented in the boxes adown. The consume to Time Warner is $1 per customer for licensing fees.
Preferences Showtime History Chanel Customer 1 9 2 Customer 2 3 8
1. Should Time Warner parcel or hawk individually? (Essay) 2. Should Time Warner parcel if everyone likes Showtime further than the History Channel, i.e., preferences are categorically correlated. (Essay) 3. Suppose Time Warner could hawk Showtime for $9, and History medium for $8, time making Showtime-History parcel availserviceable for $13. Should it use qualified bundling. i.e., hawks works twain individually and as a parcel? (Essay)