Consumer Valuationsfor Two Versions ofthe Honda PilotConsumer TypeHondaPilot 4WD 4WDLXHonda PilotTouring$37,000$44,000Highly price-sensitive $32,000Less price-sensitiveHonda plans on pricing the 4WD LX at$30,000 and the Touring model at $40,000. Isthis pricing structure incentive compatible?How much would Honda get from selling totwo customers-one of each type?A. Yes; $70,000.B. No; $70,000.C. Yes; $76,000.D. There's not enough information to be ableto determine the answer.E. No; $60,000.Suppose that the Touring model costs just$1000 more to produce than the 4WD LX.How much can Honda raise the price on theTouring model (keeping the price on the 4WDLX unchanged) without reducing profit?A. $599.99.B. $999.99.C. $1499.99.D. $499.99.E. $0.$33,500

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Consumer Valuations for Two Versions of the Honda Pilot Consumer Type Honda Pilot 4WD 4WD LX Highly price-sensitive $32,000 $37,000 Honda Pilot Touring Lecs price-sensitive $33 500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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