PB 70 0.0005QB (brand name) nd PP 20-0.0002QP (private label). Quantities are measured in thousands per month and price refers to the wholesale price in pounds. ETC currently sell rand name tyres at a wholesale price of £28.50 and private label tyres at a wholesale price of £14. Which of the ollowing statements is true? elect one: O a. O b. The brand name price is too low and the private label price too high relative to the profit maximising prices. Both prices are too high relative to the profit maximising prices. ○ c. Both prices are too low relative to the profit maximising prices. ○ d. The brand name price is too high and the private label price too low relative to the profit maximising prices.
PB 70 0.0005QB (brand name) nd PP 20-0.0002QP (private label). Quantities are measured in thousands per month and price refers to the wholesale price in pounds. ETC currently sell rand name tyres at a wholesale price of £28.50 and private label tyres at a wholesale price of £14. Which of the ollowing statements is true? elect one: O a. O b. The brand name price is too low and the private label price too high relative to the profit maximising prices. Both prices are too high relative to the profit maximising prices. ○ c. Both prices are too low relative to the profit maximising prices. ○ d. The brand name price is too high and the private label price too low relative to the profit maximising prices.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Edinburgh Tyre Company (ETC) sells identical tyres under the firm's own brand name and private label tyres to discount
stores. The tyres sold in both sub-markets are identical, and the marginal cost is constant at £10 per tyre for both types.
The firm has estimated the following demand curves for each of the markets.
PB 70 0.0005QB (brand name)
and
PP 20-0.0002QP (private label).
Quantities are measured in thousands per month and price refers to the wholesale price in pounds. ETC currently sells
brand name tyres at a wholesale price of £28.50 and private label tyres at a wholesale price of £14. Which of the
following statements is true?
Select one:
O a.
O b.
○ c.
The brand name price is too low and the private label price too high relative to the profit maximising prices.
Both prices are too high relative to the profit maximising prices.
Both prices are too low relative to the profit maximising prices.
Od. The brand name price is too high and the private label price too low relative to the profit maximising prices.
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