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Question about two part pricing strategy

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A store estimates their average customer's demand per year is Q = 20 - 4P, and knows the marginal cost of each rental is $1.00. 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?
A. $20
B. $32
C. $40
D. $64

Please show calculations

 

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9206082

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