Suppose Two Types of Consumers Buy Suits

question 124

Multiple Choice

Suppose two types of consumers buy suits.Consumers of type A will pay $100 for a coat and $50 for pants.Consumers of type B will pay $75 for a coat and $75 for pants.The firm selling suits faces no competition and has a marginal cost of zero.If the firm can identify each consumer type and can price discriminate,what is the optimal price for a pair of pants?

• A) Charge both types $150.
• B) Charge both types $75.
• C) Charge type A consumers $50, and type B consumers $75.
• D) Charge type A consumers $50, and type B consumers $50.

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Definitions:

Week

A time period consisting of seven consecutive days.

Time Series

An array of data elements, usually made up of ongoing recordings measured throughout a specific duration.

Forecast Accuracy

The degree of closeness between predicted values and actual values in forecasting.

Tracking Signal

A metric in inventory management that measures the accuracy of forecast demand against actual demand.