You manage a donut shop that s
You manage a donut shop that sells two goods – donuts andcoffee. You also face two types of customers – customer type A andcustomer type B, and you see 100 customers of each type. Theirrespective values for the 2 goods you sell are:
|
Type A |
Type B |
|
|
Donut |
$3 |
$2 |
|
Coffee |
$8 |
$3 |
If you sell donuts and coffee separately, what prices should youcharge for each?
Donuts: $______________
Coffee: $______________
If you sell the 2 goods together as a bundle, what price shouldyou charge for the bundle?
Bundle: $_______________ANSWERS IN BOLD ONLY TO RECEIVE RATING. THANKS!
Answer:
Case 1: Separate Pricing
Take the case of donuts
Revenue at a price of $3=3*100=$300 (only 100 units will besold)
Revenue at a price of $2=2*200=$400 (200 units will be sold)
Revenue is higher if donut is charged a price of $2.
So, Price of donut: $2
Take the case of coffee
Revenue at a price of $8=8*100=$800 (only 100 units will besold)
Revenue at a price of $3=3*200=$600 (200 units will be sold)
Revenue is higher if coffee is charged a price of $8.
So, Price of coffee: $8
Case 2 : Bundle Pricing
Possible prices are $11 (8+3) and $5 (3+2)
Revenue at a price of $5=5*200=$1000 (200 bundles will besold)
Revenue at a price of $11=11*100=$1100 (only 100 bundles will besold)
Revenue is higher if bundle is charged a price of $11.
So, Price of bundle: $11
Summary
If you sell donuts and coffee separately, what pricesshould you charge for each?
Donuts: $2
Coffee: $8
If you sell the 2 goods together as a bundle, what priceshould you charge for the bundle?
Bundle: $11
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
