Based on the following graph (which summarizes the demand, marginal revenue, and relevant costs for your product), determine your firm's optimal price, output, and the resulting profits for each of the following scenarios: Price 110 100 90 80 70 60 50 40 30 20 10 MC = AC Quantity MR 0 1 2 3 4 5 6 7 8 9 101112131415 D a. You charge the same unit price to all consumers.
Based on the following graph (which summarizes the demand, marginal revenue, and relevant costs for your product), determine your firm's optimal price, output, and the resulting profits for each of the following scenarios: Price 110 100 90 80 70 60 50 40 30 20 10 MC = AC Quantity MR 0 1 2 3 4 5 6 7 8 9 101112131415 D a. You charge the same unit price to all consumers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Based on the following graph (which summarizes the demand, marginal revenue, and relevant costs for your product), determine your
firm's optimal price, output, and the resulting profits for each of the following scenarios:
Price
110
100
90
80
70
60
50
40
30
20
10
MC = AC
MR
D
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Quantity
a. You charge the same unit price to all consumers.

Transcribed Image Text:a. You charge the same unit price to all consumers.
Price: $
Output:
Profits: $
units
b. You engage in first-degree price discrimination.
Price and output:
Charge the maximum price on the demand curve starting at $100 down to $40 for each infinitesimal unit up to 6 units.
Charge the maximum price on the demand curve starting at $100 down to $60 for each infinitesimal unit up to 4 units.
Charge the maximum price on the demand curve starting at $100 down to $20 for each infinitesimal unit up to 8 units.
O Charge the maximum price on the demand curve starting at $100 down to $80 for each infinitesimal unit up to 2 units.
Profits: $
c. You engage in two-part pricing.
Fixed fee: $
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