Problem:
Buy extended warranty for $950 laptop or not?
Alternative:
1) Buy extended warranty
2) Not buy extended warranty
Criteria:
Practical and cost saving in the long-run
Evaluate Alternatives:
1) <span>Buy extended warranty </span>
con:<span> pay additional $99. </span>
pro: <span>5 year warranty coverage. </span>
pro: repairs may be done at a local store
2) Not buy extended warranty
pro&con: laptop comes with one-year limited warrant
pro: no additional payment
con: repairs will be done by manufacturer
<span> con: repair costs range from $50 to $450
</span>
Decision:
BUY EXTENDED WARRANTY
When a firm uses price descrimination, people with an inelastic demand curve will pay higher prices for the item relative to those purchasing the product and have an elastic demand curve
Look at the very last page (page 2) of this pdf, does it help?
https://www.monmouth.edu/resources-for-writers/documents/bluebook-explanatory-parentheticals.pdf/