Answer Happy

As a budding entrepreneur, you have purchased a small bagel shop. You have engaged in a market study to categorize your customers' willingness to pay for a meal (coffee+bagel) into 8 equal sized groups: ($5.00, $4.50, $4.00, $3.50, $3.00, $2.50, $2.00, $1.50). All of your costs are fixed except labor and materials, which cost $2.25 per meal sold. (a) What price should you charge for a meal? (Enter dollars and cents, separated by a decimal point; don't include the "$"). (b) Suppose your market research tells you that the four lowest value groups are all students. Should you offer a student discount? If so, how much of a discount? (Enter dollars and cents, separated by a decimal point; don't include the "$").