Question

A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $67 and one with auto-defrost at $124, while women value a simple microwave at $57 and one with auto-defrost at $67.

Suppose the manufacturer is considering three pricing strategies:

1.	Market a single microwave, with auto-defrost, at $67, to both men and women.
2.	Market a single microwave, with auto-defrost, at $124, to only men.
3.	Market a simple microwave to women, at $57. Market a microwave, with auto-defrost, to men at $113.

For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

Strategy

Revenue from Men

Revenue from Women

Total Revenue from Strategy

1. Auto-Defrost Microwave only at $67

2. Auto-Defrost Microwave only at $1243. Simple Microwave at $57, Auto-Defrost Microwave at $113

Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this means that there are two men, and no women.

Under these conditions, pricing strategy   would maximize revenue for the manufacturer.

Answer 1

As per question, we have to consider only for men to purchase the Microwave. Now it's very simple to determine whether market a microwave with auto defrost can make Maximum revenue for the manufacturer in term of Men.

Now we have three pricing strategy for men as you see above the question from the table.

As per table, consider only men

In 2nd price strategy shows that the single microwave with auto defrost $124 is doubled compare to 1st price strategy statement while considering both men and women.

And Again Normally marketing a microwave with auto defrost shows $113 for men.

Actually prices of microwave for women is low compare to men because its depends upon on individual who prefer or valuing the item (Microwave) more. So the manufacturer understood that the men valuing the microwave with auto defrost higher the women.

Here the Law of demand plays a role" that there is a negative or inverse relationship between the prices and quantity demanded of a commodity over a period of time "

Quantity demand = Men, Women based on price.

Product are same but prices differ according to valuing the item or product  ( Microwave )that is quantity demanded varies inversely with price.

As per question, if we assume for men definitely manufacturer will maximize his revenue for sure because they analyzed the preference of men .By using the tactics of law of demand so manufacturer will earn more.