The following chart tells you the willingness to pay (WTP) for generic and custom refrigerators for three types and the number of each type on your market. Each refrigerator costs $200 to make the generic and $250 to make the custom. High Value Medium Value Low Value #of each type 20 30 30 Value for generic 600 500 175 69 Total value for Custom 750 575 200 If you were only to sell the generic refrigerator, what price should you set? If you were to sell both refrigerator types, what price should you set for the custom refrigerator?

The following chart tells you the willingness to pay (WTP) for generic and custom refrigerators for three types and the number of each type on your market. Each refrigerator costs $200 to make the generic and $250 to make the custom. High Value Medium Value Low Value #of each type 20 30 30 Value for generic 600 500 175 69 Total value for Custom 750 575 200 If you were only to sell the generic refrigerator, what price should you set? If you were to sell both refrigerator types, what price should you set for the custom refrigerator?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The following chart tells you the willingness to pay (WTP) for generic and custom refrigerators for three types and
the number of each type on your market. Each refrigerator costs $200 to make the generic and $250 to make
the custom.
High Value
Medium Value
Low Value
#of each type
20
30
30
Value for generic
600
500
175
Total value for Custom
750
575
200
If you were only to sell the generic refrigerator, what price should you set?
If you were to sell both refrigerator types, what price should you set for the custom refrigerator?

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