Using the Same Information as Above,suppose You Cannot Distinguish Between

question 141

Multiple Choice

Using the same information as above,suppose you cannot distinguish between the two groups of students.However if you offer a rebate,you know that the EMBA students will never redeem the rebate while MBA students will always redeem the rebate.What is the optimal full price for the Primer and Optimal rebate?

• A)Charge $300 for the primer and offer $200 for the rebate
• B)Charge $300 for the primer and offer $100 for the rebate
• C)Charge $300 for the primer and do no offer any rebate
• D)Charge $100 for the primer and do not offer any rebate

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Definitions:

Demand Schedule

A demand schedule is a table that shows the amount of a product or service consumers are willing and able to purchase at various prices during a specified period.

Profit-Maximizing Price

The price level at which a firm can achieve the highest possible profit on its product, based on its cost structure and the demand curve it faces.

Herfindahl Index

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them. It squares and then sums the market shares of all firms in the industry.

Market Shares

A part of the market that is influenced or owned by a particular company or product, usually measured as a percentage of the market's complete sales.