Trisha's Fashion Boutique sells earrings and pendants. Trisha has two types of customers. Their willingness-to-pay for earrings and pendants are given in the table below
If Trisha bundles the earrings and pendants together, could she increase revenue? Earrings Pendant Type I 100 65 Type II 90 75
If Trisha bundles the products together and sells the bundle for $165, each of her customers will be willing to buy the bundle. Without bundling, Trisha would need to sell the earrings for $90 and the pendants for $65 in order to sell each customer both items. Thus, revenue from both items is $155 for each customer. Bundling increases Trisha's revenues by $10 per customer.
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Bob invests $25 in an investment that has a 50% chance of being worth $100 and a 50% chance of being worth $0. From this information we can conclude that Bob is
A) risk loving. B) risk neutral. C) risk averse. D) Any one of the three above.
Maude is complaining about how much she pays in taxes now that the economy is finally doing really well. Even though she's in the same tax bracket as she was last year, she's paying $500 more in taxes this year, just because she earned more overtime pay this year. Maude's increased tax payment to the government is an example of:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. discretionary fiscal policy. D. automatic stabilizers.
An example of direct stock ownership is when a person
a. pays into a pension fund that buys stocks b. puts money into an insurance company that buys stocks c. invests money in a mutual fund that buys stocks d. asks a stockbroker to buy stocks for him or her e. puts funds into a trust fund that buys stocks
Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:
A. consumers are boycotting local retailers. B. Wal-Mart engages in illegal acts of monopolization. C. there are diseconomies of scale in retail sales. D. there are economies of scale in retail sales. E. Wal-Mart is managed by ruthless business people.