What price should you charge for a donut-coffee combo

Reference no: EM13239678

As a budding entrepreneur, you have purchased a small bakery. You have engaged in a market study to categorize your customers' willingness to pay for a donut/coffee combo into 9 equal sized groups: ($3.00, $2.75, $2.50, $2.25, $2.00, $1.75, $1.50, $1.25, $1.00). [This means that one group of customers is willing to pay a maximum of $3.00 for a donut+coffee, another equal-sized group is willing to pay a maximum of $2.75, a third equal-sized group will pay a maximum of $2.50, and so on.] Each group has 100 customers so there is maximum potential for 900 customers. All of your costs are fixed except labor and materials, which cost $1.10 per donut/coffee combo.
What price should you charge for a donut/coffee combo?

Reference no: EM13239678

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