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Economics

Your firm sells a perfume. The daily demand for your perfume estimated by your economists is given by P=150-5Q Your marginal cost is constant at $2 per bottle, fixed cost is 0, and ATC is also constant at $2. (a) Write down the expression for Marginal Revenue. (b) Choose the quantity and the price of a bottle of perfume to maximize your profit, assuming that you can only charge one price. (c) Compute the profit from part (b) (d) Find the profit you could earn if you were able to perfectly price discriminate. (e) An experienced salesman offers his service (help you perfectly price discriminate) for $800. Based on c) and d), do you accept the salesmans offer? Show work, and explain briefly.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9446063

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