Parking Lot Optimization
Suppose your elasticity of demand for your parking lot spaces is-2, and price is $8 per day.
If your MC is
zero, and your capacity is 80% full at 9 A.M. over the last month, are you optimizing?
A manufacturer of microwaves has discovered that male shoppers have little value for microwaves and
attribute almost no extra value to an auto-defrost feature.
Female shoppers generally value microwaves
more than men and attribute greater value to the auto-defrost feature.
There is little additional cost to
incorporating an auto-defrost feature.
Since men and women cannot be charged different prices for the
same product, the manufacturer is considering introducing two different models.
The manufacturer has
determined that men value a simple microwave at $70 and one with auto-defrost at $80 while women