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## Suppose there are three types of customers who frequent Loui

Paper help Economics Suppose there are three types of customers who frequent Loui

# Suppose there are three types of customers who frequent Loui

Suppose there are three types of customers who frequent Louisiana Fried Chicken (LFC), a fast food c… Show more; Suppose there are three types of customers who frequent Louisiana Fried Chicken (LFC), a fast food chain that sells chicken and biscuits. (For simplicity, assume an equal number of each type of customer) These customers have the following valuations (â€œreservation pricesâ€) for chicken and biscuits: Consumer Chicken Biscuits 1 \$12 \$1 2 \$10 \$3 3 \$9 \$4 Suppose the fully allocated cost of making an order of chicken is \$6 and the fully allocated cost of making an order of biscuits is \$2.50. If LFC does not know the identities of the customers (i.e. is unable to price discriminate) and sets one price for chicken (regardless of who buys) and one price for biscuits (regardless of who buys), what would those prices be? Please explain your answer. Answer

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