Determine the optimal two-part pricing strategy

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You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250 − 40Q, and your cost function is C(Q) = 10Q.

a. Determine the optimal two-part pricing strategy.

b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?

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Reference no: EM13976360

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