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.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Note:-

  • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
  • Answer completely.
  • You will get up vote for sure.
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: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.
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: $
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: $
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 6 steps with 17 images

Blurred answer
Knowledge Booster
Virtual Market Place
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education