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. Should the firm bother to sell output to the nighttime market?

A) Yes,because only $77,200 of profit is earned by serving only the daytime buyers.
B) Yes,because only $137,200 of profit is earned by serving only the daytime buyers.
C) No,because $240,000 of profit is earned by serving only the daytime buyers.
D) No,because $300,000 of profit is earned by serving only the daytime buyers.