Dana johnson corp. is considering adding a fourth plant to its three existing facilities in decatur, minneapolis, and carbondale. both east st. louis (option 1) and st. louis (option 2) are being considered. from existing plants to decatur minneapolis carbondale demand blue earth $20 $17 $21 250 ciro $25 $27 $20 200 des moines $22 $25 $22 350 capacity 300 200 150 from proposed plants to east st. louis (option 1) st. louis (option 2) blue earth $29 $27 ciro $30 $28 des moines $30 $31 capacity 150 150 location production costs ($) decatur $50 minneapolis 60 carbondale 70 east st. louis 40 st. louis 50 evaluating only the transportation costs: a. what is the cost considering east st. louis = $ b. what is the cost considering st. louis? = $ c. which location would you choose? now use the transportation data and the unit production costs: d. what is the cost considering east st. louis? = $ e. what is the cost considering st. louis? = $ f. which location would you choose?

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.