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Your firm sells a perfume for women. You believe you can get more profit by capturing more consumer surplus from each customer by implementing 2-part pricing at your store. Your marginal cost is $2 per bottle of perfume. The demand of a representative customer for your perfume is given by P = 30 (a) Implement a 2-part pricing scheme for your perfume. (b) Explain briefly why TOTAL profit (profit from entire sales) is still likely to be lower with this pricing scheme than with perfect price discrimination, despite charging a fixed fee equal to the entire Consumer Surplus of a typical consumer?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M9445821

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