1. Individual Problems 14-1Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $91 in total.Mattel is currently considering two pricing strategies:•Strategy 1: Sell each doll for $24 and each accessory for $24•Strategy 2: Sell each doll for $5 and each accessory for $43 In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy. Revenue from Low-Value CustomersRevenue from High-Value CustomersTotal Revenue from Strategy$48 Value, 1 Accessory$91 Value, 2 Accessories($)($)($)Strategy 1$24 doll + $24 accessory Strategy 2$5 doll + $43 accessory The strategy that generates the most revenue is strategy 1 or 2? please fill in the chart

Mattel is a profit-maximizing company. Its objective is to set the price of dolls and accessories…

Answered: Suppose Mattel, the producer of Barbie…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Individual Problems 14-1

Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $48. Each of the high-value consumers buys one doll and two accessories and is willing to pay $91 in total.

Mattel is currently considering two pricing strategies:

•	Strategy 1: Sell each doll for $24 and each accessory for $24
•	Strategy 2: Sell each doll for $5 and each accessory for $43

In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.

	Revenue from Low-Value Customers	Revenue from High-Value Customers
$48 Value, 1 Accessory	$91 Value, 2 Accessories	($)
($)	($)
Strategy 1
$24 doll + $24 accessory
Strategy 2
$5 doll + $43 accessory

The strategy that generates the most revenue is strategy 1 or 2?

please fill in the chart

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