Week 5 Homework.docx - Week 5 Homework 12.1 Suppose your...

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Week 5 Homework12.1 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 9am over the last month, are you optimizing?
14.4 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 value a simple microwave at $80 and one with auto-defrost at $150. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue? What if women comprise the bulk of microwave shoppers?Simple Microwavewith Auto-DefrostMen$70$80Women$80$150

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