Sirategles 10I Elario's inverse demand for cupcakes is P = 2.5 – 100D And Elario's marginal and average cost is a constant $0.50. Suppose Elario decides to sell cupcakes only in packages of 20. a. How much would customers be willing to pay to obtain a 20-pack of Elario's cupcakes? Price for 20-pack = $ b. How much profit will Elario earn from each customer? Profit per customer: $
Sirategles 10I Elario's inverse demand for cupcakes is P = 2.5 – 100D And Elario's marginal and average cost is a constant $0.50. Suppose Elario decides to sell cupcakes only in packages of 20. a. How much would customers be willing to pay to obtain a 20-pack of Elario's cupcakes? Price for 20-pack = $ b. How much profit will Elario earn from each customer? Profit per customer: $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Pricing Strategies for Firms with Market Power – End of Chapter Problem
Elario's inverse demand for cupcakes is
1
P = 2.5 – 1Qp
-
And Elario's marginal and average cost is a constant $0.50.
Suppose Elario decides to sell cupcakes only in packages of 20.
a. How much would customers be willing to pay to obtain a 20-pack of Elario's cupcakes?
Price for 20-pack = $
b. How much profit will Elario earn from each customer?
Profit per customer: $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c3af9ef-ec53-4d36-8ada-fa398bc7643e%2F1a1a238c-aa98-4558-9929-a3bf91bcb930%2Fu08ir6n_processed.png&w=3840&q=75)
Transcribed Image Text:Pricing Strategies for Firms with Market Power – End of Chapter Problem
Elario's inverse demand for cupcakes is
1
P = 2.5 – 1Qp
-
And Elario's marginal and average cost is a constant $0.50.
Suppose Elario decides to sell cupcakes only in packages of 20.
a. How much would customers be willing to pay to obtain a 20-pack of Elario's cupcakes?
Price for 20-pack = $
b. How much profit will Elario earn from each customer?
Profit per customer: $
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