This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Coffee Mug Pricing Manny's Merchandising can custom print logos onto coffee mugs. It sells it most ... (Read 135 times)

Alygatorr01285

  • Hero Member
  • *****
  • Posts: 564
on: Jul 1, 2018
Coffee Mug Pricing Manny's Merchandising can custom print logos onto coffee mugs. It sells it most popular style for 10 and has a marginal cost, including a blank mug and the printing, of 6 . Manny recently ran a diff-in-diff experiment and determined your demand elasticity is -5 . Should Manny raise or lower price?

Question 2

Would the customer be able to convince the shopkeeper that he would walk out if he receives a high price?
 a. Yes, because walking out is most profitable move for the customer
  b. No, because walking out is an unprofitable strategy for the customer
  c. No, because walking out is not a credible threat
 d. Both B&C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

frre432

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jul 1, 2018
Answer to Question 1

Manny's current markup is (P-MC)/P = (10-6)/10 = 0.4 . Manny's desired markup is 1/e = 0.2 . Your current markup is too high so he should lower the price to 7.50.

Answer to Question 2

d


Alygatorr01285

  • Member
  • Posts: 564
Reply 2 on: Jul 1, 2018
Thanks for the timely response, appreciate it

chjcharjto14

  • Member
  • Posts: 342
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

After a vasectomy, it takes about 12 ejaculations to clear out sperm that were already beyond the blocked area.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

A seashell vendor in Tanzania sells to tourists seashells which have been taken from the sea alive, A seashell vendor in Tanzania sells to tourists seashells which have been taken from the sea alive,
Timothy O'Sullivan (negative) and Alexander Gardner (print), A Harvest of Death, Gettysburg, ... Timothy O'Sullivan (negative) and Alexander Gardner (print), A Harvest of Death, Gettysburg, ...
Global Coffee Production Global Coffee Production
Use tap water when making coffee, tea, or juice from concentrate, and for food preparation Use tap water when making coffee, tea, or juice from concentrate, and for food preparation
Coffee will not sober you up. An intoxicated person who drinks coffee will end up being a stimulated Coffee will not sober you up. An intoxicated person who drinks coffee will end up being a stimulated
Custard Dessert With Coffee Custard Dessert With Coffee
Video: Renin/Angiotensin (water gain from urine & Na ion and water reabsorption)

For a complete list of videos, visit our video library