Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![(Figure: Type A and Type B I) Suppose a firm plans to use indirect price discrimination through quantity discounts. The firm cannot identify which customers are Type A or Type B
before the purchase, so the firm would like to offer a regular-price plan and a quantity-discount plan to suit the customers' personal price sensitivity.
Type A
Price (S) 3-
Price (S) 4
3
2-
1
03
5
6
0
4
MR
1 2 3 4 5 6 7
D
MC
8 9 10
Quantity
2.50
2
1
The minimum number of units customers should have to buy to get the discount is
0
Type B
MC
MR
2 4 6 8 10 12 14 16 18 20 22 24
Quantity
D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffe591e3e-c1e9-4180-ad99-642a1f427277%2F86c50a69-295e-497e-babe-13e8b684fb0a%2Fw6tx83q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(Figure: Type A and Type B I) Suppose a firm plans to use indirect price discrimination through quantity discounts. The firm cannot identify which customers are Type A or Type B
before the purchase, so the firm would like to offer a regular-price plan and a quantity-discount plan to suit the customers' personal price sensitivity.
Type A
Price (S) 3-
Price (S) 4
3
2-
1
03
5
6
0
4
MR
1 2 3 4 5 6 7
D
MC
8 9 10
Quantity
2.50
2
1
The minimum number of units customers should have to buy to get the discount is
0
Type B
MC
MR
2 4 6 8 10 12 14 16 18 20 22 24
Quantity
D
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