At last assume type 1 buyers have the price elasticity of

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Suppose you have two types of customers. Type 1 customers typically purchases your firm's product in bundles of 100 units, while type 2 customers typically purchase less than 50 units. The cost of producing one unit is $1 plus packaging costs. Packaging costs $1 per unit for small orders, but only $10 for a bundle of 100 units. Finally, suppose type 1 buyers have a price elasticity of demand equal to -2, while type 2 buyers have an elasticity equal to -1.25. What price will you charge each type of buyer?

Reference no: EM13391698

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