Mkt 300 Assignment 1

Mkt 300 Assignment 1 - Kate Eichman Marketing 300...

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Kate Eichman Marketing 300 Discussion Section: 309 10/12/11 Assignment 1 1. Considering the two price levels, $90 and $60, the better price level is $60 . Since profit = unit contribution margin x quantity – fixed expense and unit contribution margin = price – unit variable cost we can find the following data: Price Quantity $40 1 $50 2 $60 4 $90 1 $120 2 Based off the customer and value chart we can see three people are willing to buy the product at $90 while seven people are willing to buy the product at $60. $90 price level: P = ($90 - $20) x 3 = $210 $60 price level: P = ($60 - $20) x 7 = $280 Therefore we can determine the $60 price level is more profitable since it will make $280 while the $90 price level will only make $210. Price Quantity $100 1 $90 2 $80 1 $70 1 $50 1 $40 4 $30 1 $20 1 2a. Customer WTP 1 90 2 100 3 90 4 70 5 80 6 50 7 40 8 40 9 40 10 30 11 40 12 20
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$80 Price Level: P = ($80 - $10) x 4 = $280 $50 Price Level: P = ($50 - $10) x 6 = $240 Therefore we can determine the $80 price level is more profitable since it will make $280
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This note was uploaded on 11/21/2011 for the course MKT 300 taught by Professor Barnes during the Fall '08 term at Wisconsin.

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Mkt 300 Assignment 1 - Kate Eichman Marketing 300...

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