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A firm has estimated that the demand for its product comes from two types of customers, type I and type II. Each type I customer -there are 30 of them- has a demand curve given by Q = 20 - P, while each type II customer -there are 50 of them- has a demand curve given by Q = 15 - P. The firm's marginal cost is constant and equal to $5. Suppose the firm wants to use a two-part pricing strategy (T; P), and it has decided to set P = $5 (we know this need not be optimal, but this is what the firm has decided to set). With P= $5, the profit-maximizing T is

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91835622

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