Marcus Theatres is a large movie chain based in Milwaukee. Suppose that you are a manager of a similar movie chain. You are working with a candy manufacturer like Hershey to produce a signature candy bar. You have surveyed your customers about their willingness to pay for different-sized candy bars. Each customer will buy one bar. For simplicity, assume that all customers have the same demand, which is illustrated in the figure along with the marginal cost and marginal revenue. Suppose that the only cost of a bar is the price the manufacturer charges and that it offers whatever size bar you want for a cost of

$0.60 per ounce.

a. If you operate as a single-price monopoly, what size bar will you select, what price will you charge, and what is your economic profit per bar?

b. If you use an all-or-nothing offer, what size bar will you select, what price will you charge, and what is your economic profit per bar?

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Price and cost (dollars per ounce of bar) $1.00 $0.80 $0.60 MC D $0.40 $0.20 MR 0 1 2 3 4 5 Quantity (ounces)