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 = 400 −20Q, and your cost function is C(Q) = 120Q.a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 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 = 400 −20Q, and your cost function is C(Q) = 120Q.a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
You are the manager of a
a. Determine the optimal two-part pricing strategy.
Per-unit fee: $
Fixed fee: $
b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit
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