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# F11MKT300Assignment2_AnswerKey - Fall 2011 MKT 300...

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Fall 2011 MKT 300 Assignment 2 Question 1: Breakeven analysis (4 points) Trang runs a Vietnamese pho restaurant. Each regular size of pho sells for \$5.50. The variable cost per bowl is \$2.50. She currently sells 150 bowls of pho per day. Trang is considering a price change. a. What is the minimum number of additional bowls that she has to sell to break even on a price cut to \$5.00? (2 points) b. Re-calculate the answer to part (a) assuming that the variable cost per bowl drops to \$2.30. (2 points) Answer: 1a) = [(\$5.50-\$5.00)/(\$5.00-\$2.50)] * 150 = 30 bowls 2a) = [((\$5.50-\$5.00)-(\$2.50-\$2.30))*150] / (\$5.00-\$2.30) = 17 bowls Question 2: Pricing Multiple Product Versions (5 points) Christine’s company produces two versions of a software program, “Advanced” and “Basic”. There are 2 segments of customers, the Managers and the Students. The respective segment sizes are 2000 and 5000. The per-unit cost of producing the Advanced version is \$30, while the per- unit cost of producing the Basic version is \$15. The willingness to pay (WTP) for each version, by segment, is given as follows:

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F11MKT300Assignment2_AnswerKey - Fall 2011 MKT 300...

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