NICCO_Group 7

Manish
Montu Gambhir
Naga Praveen G
Nikhil Kadham
 No. Demand function on each day is different due to which optimal
Should you set revenue can be gained through differential pricing.
a common Setting a fixed price of $25 gives us maximum revenue of $119,933

price for all

days in a week? Day Slope Intercept/Market Size Demand Revenue

If yes, what
Sunday -62 3,098 1,000 25,498

Monday -50 1,496 226 5,760

should be the Tuesday -40 1,400 380 9,679

profit- Wednesday -42 1,509 439 11,203

maximizing Thursday

Friday
-53

-56
2,002

2,497
659

1,000
16,796

25,498
common price? Saturday -60 3,300 1,000 25,498

Grand Total 1,19,933

Will you gain Yes. Variable pricing will give incremental revenue of $35,320.
However, this type of pricing creates confusion and customers might
more by going have a negative perception about the company

for variable
pricing? What is Day Slope Intercept/
Market Size
Demand Price Revenue

the increase in Sunday -62 3,098 1,000 34 33,876

profit because of Monday -50 1,496 748 15 11,235

the variable Tuesday -40 1,400 700 17 12,245

pricing vis-à-vis
Wednesday -42 1,509 754 18 13,570

Thursday -53 2,002 1,000 19 19,019

common Friday -56 2,497 1,000 27 26,971

pricing? Saturday -60 3,300 1,000 38 38,337

Grand Total 155,253

Analyse mixed This mechanism is preferable though the revenue might be less than the
dynamic pricing on all the days. However, we get incremental revenue of
pricing $22,712 compared to a fixed pricing mechanism

mechanism in
detail by Day Slope Intercept/
Market Size
Demand Price Revenue

comparing it
Sunday -62 3,098 1,000 33,876 34

Monday -50 1,496 504 10,036 20

with common Tuesday -40 1,400 603 12,009 20

and variable Wednesday -42 1,509 673 13,413 20

pricing
Thursday -53 2,002 952 18,975 20

Friday -56 2,497 1,000 19,921 20

mechanisms. Saturday -60 3,300 1,000 33,876 34

Grand Total 142,105

Insights about the impact of various pricing mechanisms

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