Essay
The demand for action figures based on characters from children's movies is extremely high around the time the movie is released. In this peak period, demand for action figures is The resulting marginal revenue curve is
Some time after the movie release, interest in the action figures wanes. In this lull period, demand for the action figures becomes
The resulting lull period marginal revenue curve is
Suppose the marginal costs of producing the action figures are constant at $1.50. What is the optimal pricing strategy in the two different periods?
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