Suppose a firm faces an identical inverse demand curve of p = 110- q for each consumer in the market. Currently, the firm's average cost = marginal cost = $20. Determine the profit-maximizing price and identical lump-sum fee to charge with a two-part tariff. The profit-maximizing price to charge is $. (Enter a numeric response using a real number rounded to two decimal places.) The profit-maximizing lump-sup fee to charge is $. (Enter a numeric response rounded to the nearest dol ar.)

Suppose a firm faces an identical inverse demand curve of p = 110- q for each consumer in the market. Currently, the firm's average cost = marginal cost = $20. Determine the profit-maximizing price and identical lump-sum fee to charge with a two-part tariff. The profit-maximizing price to charge is $. (Enter a numeric response using a real number rounded to two decimal places.) The profit-maximizing lump-sup fee to charge is $. (Enter a numeric response rounded to the nearest dol ar.)

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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