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A local video store estimates that their average customer's demand per year is P = 3.5 - 0.5Q (all customers are identical), and knows that the marginal cost of each rental is $0.5. How much should the store charge for an annual membership in order to extract all the consumer surplus using an optimal two-part pricing strategy?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9694033

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