In order to price at a point where the increase in

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In order to price at a point where the increase in quantity is 20% (at capacity), we would have to decrease the price by 10% bringing it to $7.20 per day. If we assume that the parking lot has 100 spaces, for simplicity, we can look at the effect that lowering price while increasing demand has on total revenue:
This chart shows that even after reducing the price, the marginal revenue is greater than the marginal cost and therefore the parking lot is currently not operating at optimization and could benefit from a price decrease. 14.4 Microwave Ovens A manufacturer of microwave ovens 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 the men value a simple microwave at $70 and one with an auto- defrost at $80 while women value a simple microwave at $80 and one with an auto- defrost feature at $150.

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