Answered: 3- Faced with two distinct demand…

3- Faced with two distinct demand functions Q_{1} = 24 - 0.2P Q_{2} = 10 - 0.05P_{2} Where TC = 35 + 40Q what price will the firm charge (a) with discrimination (b) without discrimination

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.

Question

3- Faced with two distinct demand functions Q_{1} = 24 - 0.2P Q_{2} = 10 - 0.05P_{2}

Where TC = 35 + 40Q what price will the firm charge (a) with discrimination (b) without discrimination

3- Faced with two distinct demand functions
Qi = 24 - 0.2P,
Q2 = 10 – 0.05P2
Where TC 35+40Q, what price will the firm charge (a) with discrimination
(b) without discrimination
4- Prove that total revenue is maximized for a linear demand function, P = a -bQ, point
where Q = a/2b .
- Minimize the following cost function:
TC = 1/3Q' - 8.5Q² + 60Q+27
%3D
80=10-05P
P=lo-20

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