Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10 lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Parcels Market Price Parcels TR MR TC MC MR-MC Profit 100 0 1150 90 50 1650 80 100 2150 70 150 2650 60 200 3150 50 250 3650 40 300 4150 30 350 4650 20 400 5150 10 450 5650
Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10
lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices?
Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy?
The Parcels Market
Price Parcels TR MR TC MC MR-MC Profit
100 0 1150
90 50 1650
80 100 2150
70 150 2650
60 200 3150
50 250 3650
40 300 4150
30 350 4650
20 400 5150
10 450 5650
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