# Managerial Economics

12.1 Parking lot optimization. Suppose your elasticity of demand for your parking lot space is -2, and price per day is $8 per day. If ypur marginal cost is zero and your capacity is 80% full at 9am over last month, are you optimizing?

14.4.Microwave ovens:

A manufacturer of microwaves has discovered that male shoppers have little value for microwaves and attribute almost no extra value to an auto defrost feature. Female shoppers generally value microwaves more than men and attribute greater value to autodefrost feature. There is little additional cost to incorporating an auto-defrost feature.

Since men and women cannot be charged different prices for thesame product, the manufacturer is considering introducing two different models. The manufacturer has dtermined that men value a simple microwave at $70 and one with autodefrost at $80 while women value a simple microwave at $80 and one with autodefrost at $150.

If there is an equal number of men and womwn, what pricing strategy will yield the greates revenue? What if womwn comprise the bulk of microwave shoppers?

use the table and show all your calculations and decision making.

Men | Women | |

Autodefrost | $80 | $150 |

No Auto defrost | $70 | $80 |

14.6 . Bundling:

At a student cafe', there are equal numbers of two types of customers with the following values. The cafe owner can not distinguish between the two types of students because many students without early class arrive early anywhere (i.e she can not price descriminate).

The Marginal cost (MC) of coffee is 10. The MC for banana is 40. Is bundling more profitable than selling seperately? If so what price should be charged for the bundle? refer to the table below for all calculations

students with early classes | students without early classes | |

coffee | 70c | 60c |

Banana | 50c | $1 |

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