Sunglasses manufacturer Oakley, Inc. produces high-end and low-end versions of their performance sunglasses. They estimate that the demands for their products are given by: High-end sunglasses: P 130 - 20H, and Low-end sunglasses: P- 80 - QL, where Q is measured in 1000 sunglasses, "H denotes High-end and "L" denotes Low-end Both types of sunglasses are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of sunglasses is constant at $30. Supposing that (1) the two demands are independent and () Oakley can produce and market the sunglasses such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Oakley would dharge for each version? Oakley will set price equal to marginal cost for both versions, Ie, P $30. O By the "midpoint rule", PH- $65 and PL $40. OPH $80 and PL $55. OPH- $130 and PL $80.

Sunglasses manufacturer Oakley, Inc. produces high-end and low-end versions of their performance sunglasses. They estimate that the demands for their products are given by: High-end sunglasses: P 130 - 20H, and Low-end sunglasses: P- 80 - QL, where Q is measured in 1000 sunglasses, "H denotes High-end and "L" denotes Low-end Both types of sunglasses are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of sunglasses is constant at $30. Supposing that (1) the two demands are independent and () Oakley can produce and market the sunglasses such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Oakley would dharge for each version? Oakley will set price equal to marginal cost for both versions, Ie, P $30. O By the "midpoint rule", PH- $65 and PL $40. OPH $80 and PL $55. OPH- $130 and PL $80.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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