Consider the Following Scenario to Answer the Following Questions: the Varsity,located

question 158

Multiple Choice

Consider the following scenario to answer the following questions: The Varsity,located in downtown Atlanta,is the world's largest drive-in restaurant.Located near the Georgia Tech campus,the drive-in attracts two distinct types of customers-college students and visitors to Atlanta.The owners are considering offering a student discount of $1 off their combo meal,which is regularly priced at $9.There are 5,000 students interested in purchasing a combo meal,with a maximum willingness to pay of $8.There are 5,000 visiting customers interested in purchasing the combo meal,with a maximum willingness to pay of $9.Assume that each customer,at most,will purchase a single meal and the marginal cost is $5.
-Mirabella Creations is a custom jewelry company that specializes in unique,handmade,wearable artwork.Each piece of jewelry offered for sale is made after an extensive customer consultation that results in a one-of-a-kind piece of heirloom jewelry.To maximize profits,the firm owner should charge

• A) the same price to all customers.
• B) the price that the market will bear.
• C) a price that will cover the firm's fixed costs.
• D) a price that is close to each customer's willingness to pay.
• E) a price that is competitive with mass-market jewelers available in their service area.

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Definitions:

Operating Lease

A lease agreement for the use of an asset without ownership, typically with shorter terms than a finance lease.

Lessor

An entity or individual who leases or rents out an asset to another, known as the lessee, under a lease agreement.

Lease Period

The specified duration for which a lease agreement is effective, giving the lessee the right to use an asset.

Financial Lease Arrangement

A type of lease where the lessee pays for the use of an asset for most of its useful life and has rights similar to ownership.