Your dad is always trying different get-rich schemes. You decline his offer to help with the production process or to work. However, you agree to help him market the product through his website. His initial plan to provide 15 percent discounts to people based on their hair color - blonde people get a discount on vanilla ice cream, red-headed people get a discount on cherry ice cream, What is your advice to your uncle? Will the discounts based on hair color help to increase his sales revenue? Should he try other types of discounts? If so, what sort of pricing program would help dad make some profits?
You own and operate a chain of restaurants throughout the Atlantic States, and you have been in this business for over 40 years. From your experience, you believe your current store size provides the lowest average total cost for business in your industry. In the past two years, a new entrant into your market has built very large restaurants that are roughly three- times the size of your stores. They charge prices that are comparable to your prices, but they are getting a lot of attention and taking some of your market share. If you are correct about the industry cost structure and the new entrant has built stores that are far too large, what do you think will happen in this market? Should you respond by increasing the size of your restaurants? Are there other thinks you should do?