Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in class. Student Price 1 60 2 54 3 48 4 42 5 36 6 30 7 24 8 18 What price will Campus Books charge if it must charge a single price to all of its customers? If Campus Books is permitted to price discriminate what would the discounted price of the book be?
Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in class. Student Price 1 60 2 54 3 48 4 42 5 36 6 30 7 24 8 18 What price will Campus Books charge if it must charge a single price to all of its customers? If Campus Books is permitted to price discriminate what would the discounted price of the book be?
Chapter8: Monopoly
Section: Chapter Questions
Problem 3SQP
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Transcribed Image Text:Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class.
The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed
costs. The table below shows the reservation prices of the eight students enrolled in class.
Student
Price
1
60
2
54
3
48
4
42
5
36
6
30
7
24
8
18
What price will Campus Books charge if it must charge a single price to all of its customers?
If Campus Books is permitted to price discriminate what would the discounted price of the book be?
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