4. Individual Problems 14-4 A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto- defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $75 and one with auto-defrost at $136, while women value a simple microwave at $61 and one with auto-defrost at $75. Suppose the manufacturer is considering three pricing strategies: 1. Market a single microwave, with auto-defrost, at $75, to both men and women. 2. Market a single microwave, with auto-defrost, at $136, to only men. 3. Market a simple microwave to women, at $61. Market a microwave, with auto-defrost, to men at $121. For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

4. Individual Problems 14-4 A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto- defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $75 and one with auto-defrost at $136, while women value a simple microwave at $61 and one with auto-defrost at $75. Suppose the manufacturer is considering three pricing strategies: 1. Market a single microwave, with auto-defrost, at $75, to both men and women. 2. Market a single microwave, with auto-defrost, at $136, to only men. 3. Market a simple microwave to women, at $61. Market a microwave, with auto-defrost, to men at $121. For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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