You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P-350-20Q, and your cost function is CQ)=70Q. a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 70 Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price? $

You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P-350-20Q, and your cost function is CQ)=70Q. a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 70 Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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