Suppose a small student-run organization creates cellphone covers and sells these items to teachers and students. The organization's founder estimates that each co costs the organization $2 in variable labor and material expenses and there are no fixed costs (so MC = AVC = $2). Demand and marginal revenue are (where T is for teachers and S is for students): Teacher Demand: PT = 22-5QT Teacher Marginal Revenue: MRT = 22-10QT Student Demand: Ps = 10-Qs Student Marginal Revenue: MRS = 10 - 2Qs Total Cost: TC = 2Q Suppose the organization can price discriminate between its two types of customers. Calculate the profit level for this organization. Provide your solution as a whole number only.
Suppose a small student-run organization creates cellphone covers and sells these items to teachers and students. The organization's founder estimates that each co costs the organization $2 in variable labor and material expenses and there are no fixed costs (so MC = AVC = $2). Demand and marginal revenue are (where T is for teachers and S is for students): Teacher Demand: PT = 22-5QT Teacher Marginal Revenue: MRT = 22-10QT Student Demand: Ps = 10-Qs Student Marginal Revenue: MRS = 10 - 2Qs Total Cost: TC = 2Q Suppose the organization can price discriminate between its two types of customers. Calculate the profit level for this organization. Provide your solution as a whole number only.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 3E
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Transcribed Image Text:Suppose a small student-run organization creates cellphone covers and sells these
items to teachers and students. The organization's founder estimates that each co
costs the organization $2 in variable labor and material expenses and there are no
fixed costs (so MC = AVC = $2). Demand and marginal revenue are (where T is for
teachers and S is for students):
Teacher Demand: PT = 22-5QT
Teacher Marginal Revenue: MRT = 22-10QT
Student Demand: Ps = 10-Qs
Student Marginal Revenue: MRS = 10 - 2Qs
Total Cost: TC = 2Q
Suppose the organization can price discriminate between its two types of customers.
Calculate the profit level for this organization. Provide your solution as a whole
number only.
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