As Manager of the Only Video Store in Town,you Have

Essay

As manager of the only video store in town,you have noticed that on Thursday through Sunday the demand for renting your movies is much higher than it is on Monday through Wednesday.You therefore conducted a study that revealed two different market demand curves.On weekends,your inverse demand curve is P = 10 - 0.001Q; on weekdays,it is P = 5 - 0.01Q.The marginal cost of renting a movie is $.50 (50 cents).Your average customer never rents more than one movie at a time.What pricing strategy will maximize your profits?