What price must you charge for the meal does the answer

Reference no: EM13390296

As a budding entrepreneur, you have purchased a small bagel shop. You have engaged in a market study to categorize your customers' willingness to pay for a meal (coffee+bagel) into 8 equal sized groups: ($5.00, $4.50, $4.00, $3.50, $3.00, $2.50, $2.00, $1.50). All of your costs are fixed except labor and materials, which cost $2.25 per meal sold.

a. What price should you charge for a meal? Does your answer depend on the total number of consumers?

b. Suppose your market research tells you that the four lowest value groups are all students. Should you offer a student discount? If so, how much?

Reference no: EM13390296

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