Exam 14: Advanced Pricing Techniques

The Hilton Hotel chain serves both business and vacation travelers.Above, $D _ { \text {Business } }$ and $M R _ { \text {Buiness } }$ represent the demand and marginal revenue for business travelers,while $D _ { \text {vacation } }$ and $M P _ { \text {Vacation } }$ are the demand and marginal revenue for vacation travelers.What is the profit-maximizing number of BUSINESS travelers to serve?

A firm faces the demand for its product, $P = 100 - 0.5 Q$ ,as shown in the figure below.It produces under conditions of constant costs in the long run,and LMC = LAC = $12 per unit. If the firm can practice first-degree price discrimination,it can make a maximum profit of

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12)and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Assuming both daytime and nighttime markets are served,the optimal per unit usage fee (f*)is

The following graph shows the demands and marginal revenue in two markets,1 and 2,for a price discriminating firm along with total marginal revenue,MR_T,and marginal cost. At the optimal price and quantity,what is demand elasticity in each market?

The Hilton Hotel chain serves both business and vacation travelers. $D _ { \text {Business } }$ and $M R _ { \text {Business } }$ represent the demand and marginal revenue for business travelers,while $D _ { \text {vacation } }$ and $M P _ { \text {Vacation } }$ are the demand and marginal revenue for vacation travelers.If marginal cost decreases to the point that total marginal revenue (MR_T is not shown in the figure)for Hilton at the profit-maximizing level of total output is $40,what price should the Hilton charge BUSINESS travelers?

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12)and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Now suppose the marketing director wishes to serve both daytime and nighttime buyers,what is the MR_f function?

A news magazine offers students a discount on the regular subscription rate.The total number of subscriptions is optimal,and,at the current prices,the marginal revenue from the last subscription sold to a student is $6,while the marginal revenue from the last subscription sold to a regular customer is $10.In order to maximize profit,the magazine should

The following graph shows the demands and marginal revenue in two markets,1 and 2,for a price discriminating firm along with total marginal revenue,MR_T,and marginal cost. What total output should the firm produce?

The following graph shows the demands and marginal revenue in two markets,1 and 2,for a price discriminating firm along with total marginal revenue,MR_T,and marginal cost. How should the firm allocate sales between the two markets?

In order to maximize profit,a firm that sells its output in two markets will allocate total output between the two markets so that:

A firm is producing two goods (X and Y)that are related in consumption.The demand function for X is: $Q _ { d } = 120 - 4 P _ { x } - 10 P _ { y }$ Which of the following pairs of goods might the firm be producing?

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12)and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Should the firm bother to sell output to the nighttime market?

A firm is producing two goods (X and Y)that are related in consumption.The demand function for X is: $Q _ { d } = 120 - 4 P _ { x } - 10 P _ { y }$ In order to maximize profit,the firm

A firm faces the demand for its product, $P = 100 - 0.5 Q$ ,as shown in the figure below.It produces under conditions of constant costs in the long run,and LMC = LAC = $12 per unit. Under uniform pricing,consumers enjoy $______ of consumer surplus.

A firm sells two goods (X and Y)that are related in consumption.The estimated inverse demand and cost functions are: =105-0.5-0.75 =120--0.5 M=10+0.25 M=16+0.5 What are the profit-maximizing prices for the two goods?

Black Diamond Tennis & Golf Club offers golf and tennis memberships to the residents of Black Diamond,Ohio,in which there are two types of families: golf-oriented families and tennis-oriented families.There are 100 golf-oriented families and 100 tennis-oriented families in Black Diamond.Forecasted demand prices for golf and tennis memberships by family type are given below.There is no way to identify family types for pricing purposes,and all costs are fixed so that maximizing total revenue is equivalent to maximizing profit. Demand Prices for Golf and Tennis Memberships Type of family Tennis membership only Golf membersh? only Tennis-oriented \ 150 \ 50 Golf-oriented \ 75 \ 200 How much total revenue can be generated each month under a pricing plan where separate golf and tennis memberships are offered?

A firm faces the demand for its product, $P = 100 - 0.5 Q$ ,as shown in the figure below.It produces under conditions of constant costs in the long run,and LMC = LAC = $12 per unit. If the firm can practice first-degree price discrimination,it will be able to collect $________ in total revenue under perfect price discrimination.