Question
1. Mr Karan is a wholesaler who sells goods in quantities. One of the strategies used by this firm is to offer discounts who buys
1. Mr Karan is a wholesaler who sells goods in quantities. One of the strategies used by this firm is to offer discounts who buys beyond certain quantities. Assume the inverse demand equation for each customer is P= 70-0.5Q and the cost of producing 1 extra unit of good is $10.
A) If the firm does not discriminate on prices charged, what would be the profit maximizing price and quantity?(5 marks)
B) How many additional quantities could the customer buy and at what price?
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Statistics For The Behavioral Sciences
Authors: Frederick J Gravetter, Larry B. Wallnau
9th Edition
1111830991, 978-1111830991
