A sand and gravel company sells pea gravel. It faces two types of customers with the following inverse demand curves: Туре A: Р %3D 3.5- 0.0020 Туре В: Р %3D 3 — 0.0010 where Q measures bags of pea gravel and P is the price per bag. The marginal cost is $0.50 per bag. Suppose the business wants to use discounting to price discriminate. The consumer surplus for Type B consumers with the regular price (no price discount) is $. 562.50 1,093.75 625.00 750.00

A sand and gravel company sells pea gravel. It faces two types of customers with the following inverse demand curves: Туре A: Р %3D 3.5- 0.0020 Туре В: Р %3D 3 — 0.0010 where Q measures bags of pea gravel and P is the price per bag. The marginal cost is $0.50 per bag. Suppose the business wants to use discounting to price discriminate. The consumer surplus for Type B consumers with the regular price (no price discount) is $. 562.50 1,093.75 625.00 750.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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