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Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858 Exercise 14
You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250 - 40 Q, and your cost function is C ( Q ) = 10 Q.
a. Determine the optimal two-part pricing strategy.
b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?
a. Determine the optimal two-part pricing strategy.
b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?
Explanation
Verified
Verified
a)The optimal per unit charge is Margina...
Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
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