What is the combined demand

Assignment Help Business Economics

Reference no: EM131386549

You have been put in charge of pricing for a monopolist. Assume that the marginal cost is zero (0). It is known that there are two consumers. Consumer I has a demand of q^d = 6 - p. Consumer II has demand q^d = 12 - 2p. But which consumer is which is unknown. Draw each type of consumers' demand curve.

a. What is the combined demand (use a demand schedule)? What is the optimal single price, the number of calls made, the profits for the firm, and the consumer surplus of each type of person.

b. With the optimal single price, what fixed fee could you charge? (Hint: what fixed fee could you charge in addition, so that the low demand consumer would still buy the same amount?)

c. You tell your boss, "We can make more money by separating out the two types of users. The boss says, "No one would want to reveal that they have a higher demand." Show you can by using two different pricing options. Hint: use the offer in b. for the low demand consumers, and create an option that the high demand consumers would choose which generates more profit from them.

d. Explain why this plan works.

Reference no: EM131386549

Questions Cloud

Is the contract covered by the ucc : The electric company argues that the electricity passing through the transmission wire was not being sold to Prince and that, therefore, there was no sale of goods to Prince. Is the contract covered by the UCC?

Discuss about the post given below : Human trafficking can be one of the most obscene and heinous criminal offenses that subjects men, women and children of all ages to exploitation of sex and disregard for basic human rights. According to the Department of Homeland Security, Human T..

Can custom and trade usage be used to interpret : HMT responds that the quantity term in the contract was definite and unambiguous. Can custom and trade usage be used to interpret an unambiguous contract? Discuss.

Calculate the out-of-pocket cost of every college : Write a program to calculate the out-of-pocket cost of every college he is applying. After each college, ask the user whether to calculate cost for another college. Enter 'y' for yes. The following is an example:

What is the combined demand : You have been put in charge of pricing for a monopolist. Assume that the marginal cost is zero (0). It is known that there are two consumers. Consumer I has a demand of q^d = 6 - p. What is the combined demand (use a demand schedule)? What is the opt..

Draw the locking receptacle for the alarm system : Draw the locking receptacle (Fig. 26-7) for the alarm system to be installed in the administration building. Create Three: Right viewports in paper space, and show the top and front views. In the large right viewport, show the SW isometric view. P..

Is the contract enforceable in the given condition : Four months later, when the price of cotton had doubled, Loeb & Co. sought to enforce the contract. Schreiner argues that he is not a merchant. Is the contract enforceable?

Explain what is meant by the term distribution policy : What is meant by the term "distribution policy"? How has the mix of dividend payouts and stock repurchases changed over time?

Discuss about the post given below : Human trafficking happens when a person is forced, against their will, to work or conduct sexual acts when they are 18. "Under the Trafficking Victims Protection Act of 2000 (TVPA), human trafficking has occurred if a person was induced to perform..

User Account

All Pages