Teascent is selling candles in Pleasantville. The incremental costs of wax, wick, and other materials for a candle are $0.80. The daily price- response function in Pleasantville is d(p) = 1100C - 980p. Teascent practices price differentiation and sells its candles for $5 to price-sensitive customers with coupons, and for $7 to quality-
Teascent is selling candles in Pleasantville. The incremental costs of wax, wick, and other materials for a candle are $0.80. The daily price- response function in Pleasantville is d(p) = 1100C - 980p. Teascent practices price differentiation and sells its candles for $5 to price-sensitive customers with coupons, and for $7 to quality-
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Teascent is selling candles in Pleasantville. The
incremental costs of wax, wick, and other
materials for a candle are $0.80. The daily price-
response function in Pleasantville is d(p) = 11000
- 980p. Teascent practices price differentiation
and sells its candles for $5 to price-sensitive
customers with coupons, and for $7 to quality-
seekers.
A: Find Teascent's daily total contribution based
on the two-price policy.
B: Find the total customer surplus based on the
two-price policy.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F307bb14a-22dd-484c-a4e2-5a743a3205c7%2Fb7b4f679-9427-407a-be29-13060b8ca031%2Frb4v6qj_processed.png&w=3840&q=75)
Transcribed Image Text:Teascent is selling candles in Pleasantville. The
incremental costs of wax, wick, and other
materials for a candle are $0.80. The daily price-
response function in Pleasantville is d(p) = 11000
- 980p. Teascent practices price differentiation
and sells its candles for $5 to price-sensitive
customers with coupons, and for $7 to quality-
seekers.
A: Find Teascent's daily total contribution based
on the two-price policy.
B: Find the total customer surplus based on the
two-price policy.
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