Jeans and Individual Demand (Part b)
Which of the following pricing strategies would result in increased profit relative to the flat-price scenario in Part a, while still incentivizing the customer to engage in the transaction?
Note: Multiple options can (and hint: should) be selected
Jeans and Individual Demand (Part b)
Which of the following pricing strategies would result in increased profit relative to the flat-price scenario in Part a, while still incentivizing the customer to engage in the transaction?
Note: Multiple options can (and hint: should) be selected
Charge the individual marginal cost ($8) for each pair of jeans and require an exclusive club membership fee of $42 to enter the store.
Charge $19 for the first pair and reduce the price by $1 for each subsequent pair, selling up to 7 pairs.
Charge a flat rate of $8 per pair of jeans to sell all 7 pairs.
Sell a bundle of 4 pairs of jeans for a total of $70.
Sell a bundle of 7 pairs of jeans for the maximum willingness to pay for 7 pairs ($98)
Charge $20 for the first pair of jeans and a $2 discount for each additional pair, selling up to 7 pairs