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Based on the following graph (which summarizes the demand, marginal revenue, and relevant costs for your product), determine your firm’s optimal price, output, and the resulting profits for each of the following scenarios:

a. You charge the same unit price to all consumers. Price: $ Output: units Profits: $

b. You engage in first-degree price discrimination. Price and output: Charge the maximum price on the demand curve starting at $100 down to $20 for each infinitesimal unit up to 8 units. Charge the maximum price on the demand curve starting at $100 down to $60 for each infinitesimal unit up to 4 units. Charge the maximum price on the demand curve starting at $100 down to $80 for each infinitesimal unit up to 2 units. Charge the maximum price on the demand curve starting at $100 down to $40 for each infinitesimal unit up to 6 units. Profits: $

c. You engage in two-part pricing. Fixed fee: $ Per-unit fee: $ Output: units Profits: $

d. You engage in block pricing. Package size: units Package price: $ Profits: $

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91857622

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