Part (a)What pricing strategy do you suggest that Tropicana adopt Part (b) Tropicana doesn’t distribute coupons in an electronic form that could be stored by a smart phone. Briefly explain why not
Tropicana is a major producer of orange juice. Different consumers have different valuations for Tropicana orange juice. Twenty-five percent of consumers value a 64 oz carton of juice at $6; while the remaining seventy-five percent value the same carton at $4. In common with many producers of consumer products, Tropicana often distribute coupons. The first group of consumers (the $6 valuation group) dislike the hassle associated with coupons; their disutility from keeping track of a coupon is $1. In contrast, the second group do not greatly mind dealing with coupons, and suffer a disutility of only 15c.(Here, "disutility" is simply a fancy way of saying dislike, with dislike measured in dollar terms.)Tropicana’s marginal cost of producing and distributing the juice is $3.
Part (a)What pricing strategy do you suggest that Tropicana adopt
Part (b) Tropicana doesn’t distribute coupons in an electronic form that could be stored by a smart
phone. Briefly explain why not
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