Reference the following costs as you complete the exercise that follows: cost to produce a pizza - $7 price charged to customer for the pizza - $10 maximum price the consumer would be willing to pay for the pizza - $12 Match each question to its correct cost response. $7 $12 $3 $5 $2 Match each of the options above to the items below. How much is the consumer surplus? How much is the consumer surplus? Open choices for matching No answer How much is the producer surplus or profit? How much is the producer surplus or profit? Open choices for matching No answer How much is the economic value created?How much is the economic value created? Open choices for matching No answer How much is the cost to produce the product or service?How much is the cost to produce the product or service? Open choices for matching No answer What is the amount of the reservation price?What is the amount of the reservation price? Open choices for matching

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?