12-4
|e| = -.05
MC = 0
$20 daily
9am capacity 96%
If at 9 am the lot is still not full at the price of $20 daily, I feel the company should reduce their prices to ensure maximum capacity of the parking lot. Because (P-MC)/P =1/|e| are not equal, I believe that the parking lot isn’t optimizing their profit. If the two equaled each other and the MR<MC then the parking lot would be optimizing their total profit. I feel they would optimize profit by offering a rate of $16 daily.

14-4
$400 now MC = $100
$300 later
$250 normal people not time frame Qty | Revenue | MR | MC | Total Profit | 1 | 400 | 400 | 100 | 300 | 2 | 600 | 200 | 100 | 400 | 3 | 750 | 150 | 100 | 450 |

Based on the above table optimal pricing is @ $250.00

14-5
MC = 0 Total Profit a. $225 – sell only to commercial users ($250) b. $150 – sell only to home users (disabled version) ($150) c. $175 – sell full versions to all users at one price ($350) d. $150 sell disabled version for low value customers and $400 full version to high value customers ($350)

If well sell the full version at a price point lower than $225, let’s say $200 the high value customers value is $25, hence if you sell the disabled version for $150 the low value consumers value is $50 ($200 – $150) IF we charge a discounted $200 for the full version the consumers of the disabled version gain more surplus by a $25 differential. In this instance I think the retailer can sell the full version at $175 or offer the full version for the higher value consumer at $200 and the disabled version for the lower value consumer at $150. Ideally its more feasible for the retailer to offer the product full version at a price of $175 for all