Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 14, Problem 14.6IP
To determine
The comparison between mixed bundling and selling separately.
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Promoters of a major college basketball tournament estimate that the demand for tickets by adults is QA = 5,000 - 10P and the demand for tickets by students is QS = 10,000 - 100P. The marginal cost and average total cost of seating an additional spectator is constant, MC = $10, The promoters want to segment the market and charge adults and students different prices. What is the profit maximizing ticket price for students?
Suppose that you are in charge of a toll bridge over the Mississippi River. The demand for
bridge crossing Q is given by the following:
2P = 20 - Q
a) How many people would cross the bridge if there were no toll? (YOU MUST SHOW
YOUR WORK TO RECEIVE CREDIT)
b) The toll bridge operator is considering setting up a price of $5.00. At that price, how
many people will cross the bridge? (YOU MUST SHOW YOUR WORK TO RECEIVE
CREDIT)
c) How many people would cross the bridge if the toll is set at $10.00? (YOU MUST
SHOW YOUR WORK TO RECEIVE CREDIT)
Marcella owns a sandwich shop. She decides to charge different prices to groups of customers. She targets one group of potential customers by giving them a discount coupon and the other group gets no coupons.
Which of the following would be a characteristic of the group that does NOT receive the discount coupon?
They _____ than the potential customers who receive coupons.
Select one:
a. have a lower reservation price
b. have a more elastic demand
c. receive equal marginal benefit from the product
d. have a less elastic demand
Chapter 14 Solutions
Managerial Economics: A Problem Solving Approach
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