Exam 14: Advanced Pricing Techniques

The WildTimes Bar offers female patrons a lower price for a drink than male patrons.The bar will maximize profit by selling a total of 200 drinks per night.At the current prices,male customers buy 150 drinks,while female customers buy 50 drinks.The marginal revenue from the last drink sold to a male customer is $1.50,while the marginal revenue from the last drink sold to a female customer is $0.50.The bar

A firm sells two goods X and Y)that are related in consumption.The estimated demand and cost conditions are: Goods X and Y are

A firm sells two goods X and Y)that are related in consumption.The estimated inverse demand and cost functions are: Good X and Y are:

firm faces the demand for its product, ,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

firm faces the demand for its product, ,as shown in the figure below.It produces under conditions of constant costs in the long run,and LMC = LAC = $12 per unit. At the profit-maximizing uniform price,the firm earns economic profit of __________ when it engages in uniform pricing.

Refer to the following: What are the profit-maximizing prices for the two goods?

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 fixed access charge A*)is

The Hilton Hotel chain serves both business and vacation travelers.Above, and represent the demand and marginal revenue for business travelers,while and are the demand and marginal revenue for vacation travelers.What is the profit-maximizing number of BUSINESS travelers to serve?

Drill Quest,Inc.manufactures drill bits for the oil industry.Drill Quest uses cost-plus pricing to set the price of its bits.Currently Drill Quest applies a 50 percent markup on average total cost.Average variable cost of producing bits is constant and equal to $6,000 per bit.Total fixed cost at Drill Quest is $550,000.DrillQuest currently produces 690 bits.Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation where Q is the number of bits demanded and P is the price of bits): If Drill Quest wishes to use cost-plus pricing,it can maximize profit by applying a markup of _____ percent on __________.

A firm faces the demand for its product, ,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 must set a uniform price for the good,what price will it set to maximize its profit in the long run?

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 The conditions are right for bundle pricing to increase profit at Black Diamond Tennis & Golf Club because

A firm sells two goods X and Y)that are related in consumption.The estimated demand and cost conditions are: 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 What is the optimal price to charge for a bundled tennis and golf and tennis membership?

The Hilton Hotel chain serves both business and vacation travelers. and represent the demand and marginal revenue for business travelers,while and 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. Should the firm bother to sell output to the nighttime market?

Drill Quest,Inc.manufactures drill bits for the oil industry.Drill Quest uses cost-plus pricing to set the price of its bits.Currently Drill Quest applies a 50 percent markup on average total cost.Average variable cost of producing bits is constant and equal to $6,000 per bit.Total fixed cost at Drill Quest is $550,000.DrillQuest currently produces 690 bits.Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation where Q is the number of bits demanded and P is the price of bits): Using cost-plus pricing,Drill Quest prices its bits at $______________ per bit.

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 price should the firm charge in each market?

To successfully practice price discrimination

A firm is producing two goods X and Y)that are related in consumption.The demand function for X is: 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. Now suppose the marketing director wishes to serve both daytime and nighttime buyers,what is the MR_f function?