Carving knives Home users' value No-name brand $40 High-end professional series $60 Professional Chefs' value $70 $130 A knife manufacturer faces two types of customers with the above values. Also assume there are equivalent numbers of both customers on the market. Given that the manufacturer only intends to sell the high-end professional series, how should it price its product? Price low at $60, sell only to the professional chefs. Price high at $130, sell only to the home users. Price high at $130, sell only to the professional chefs. Price low at $60, sell to both users.
Carving knives Home users' value No-name brand $40 High-end professional series $60 Professional Chefs' value $70 $130 A knife manufacturer faces two types of customers with the above values. Also assume there are equivalent numbers of both customers on the market. Given that the manufacturer only intends to sell the high-end professional series, how should it price its product? Price low at $60, sell only to the professional chefs. Price high at $130, sell only to the home users. Price high at $130, sell only to the professional chefs. Price low at $60, sell to both users.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Carving knives
Home users' value
No-name brand
$40
High-end professional series
$60
Professional Chefs' value
$70
$130
A knife manufacturer faces two types of customers with the above values. Also
assume there are equivalent numbers of both customers on the market. Given that
the manufacturer only intends to sell the high-end professional series, how should it
price its product?
Price low at $60, sell only to the professional chefs.
Price high at $130, sell only to the home users.
Price high at $130, sell only to the professional chefs.
Price low at $60, sell to both users.
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