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2. Consider the First and Second degree price discrimination model discussed in class. In the case of the Second Degree Price Discrimination example, suppose: a.
2. Consider the First and Second degree price discrimination model discussed in class. In the case of the Second Degree Price Discrimination example, suppose: a. If the number of units in Option B is fixed at 12 and the number of units in Option A is 6, and if the fee for option A is set equal to WTP,(6), what should be the fee for Option B to maximize profits? b. If the number of units in Option B is fixed at 12, and the number of units in Option A is x, and if the fee for option A is set equal to WTP,(x), what should be the fee for option B that would ensure consumer H buys it? c. What is the profit-maximizing number of discrete units in the Option A package? Explain. Option A: Buy a package, containing 8 units, for a total payment of $32 Option B: Buy a package, containing 12 units, for a total payment of $40
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