A Firm Sells Its Product to Two Groups of Buyers

Multiple Choice

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12) and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Assuming both daytime and nighttime markets are served,the optimal fixed access charge (A*) is

A) A* = $1,472
B) A* = $2,178
C) A* = $3,872
D) A* = $4,356
E) A* = $7,744