(Answered) A local video store estimates its average customers demand

Management Studies

A local video store estimates its average customer's demand per year is Q = 7 - 2P , and it knows the marginal cost of each rental is $0.5. How much should the store charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy? Show work, please.

(A) $9

(B) $10

(D) $12

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Business Management, Management Studies

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