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    Managerial Economics: Groupon

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    Groupon is a popular group buying and daily deals website. In a recent promotion, a local restaurant to sold buffet vouchers at a steep discount on Groupon's website. Customers who turn up at the restaurant without the vouchers will have to pay full price. Suggest reasons for the two - part pricing offered by the restaurant using the concepts of elasticities.

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    Solution Preview

    When the demand curve is plotted, the demand curve is downward sloping. At the beginning of the demand curve when it is close to the y-axis the curve is relatively steep in the middle the steepness is moderate and after the middle part the steepness decreases gradually. The price elasticity shows the percent change in the quantity demanded in response to one percent change in price. When ...

    Solution Summary

    Sales promotion with coupons from a website is explained in a structured manner in this response. Groupon is examined. The expert examines managerial economics. The answer includes references used.