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From our demand analysis, we estimated that : Q=853.68-74.56P

From our cost analysis, we found that our costs were: C=1500+0.001Q+0.0001Qˆ2

1. What price should we sell our beer for? How much do we expect to sell? What will our revenues and costs be? How much profit will we make?

2. What activities could we undertake that might increase our demand? How would we expect this to impact profit?

3. Describe a price discrimination scheme (either second- or third-degree). What sorts of prices would you charge? How would you prevent arbitrage? Would this scheme increase profit? Why? (more creative and correct answer will receive more points)

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