Efficiency “The United States can make certain toys with greater productive efficiency than can China. Yet we import those toys from China.
September 3, 2020
EC100 Lent Term Mock Exam Part I TO BE HANDED TO YOUR CLASS TEACHER BY FRIDAY OF WEEK 6 (FEB 22′”d ). Instructions to candidates [for Actual Exam}…
September 3, 2020

suppose Mattel, the producer of Barbie dolls and accessories(sold separately),has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $72. Each of the high-value consumers buys one doll and two accessories and is willing to pay $141 in total.

Mattel is currently considering two pricing strategies:

Strategy 1: Sell each doll for $ 36 and each accessory for $36

Strategy 2: Sell each doll for $3 and each accessory for $69

Indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.

KM
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