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A gas station is choosing among complex pricing strategies for its car washes. Since they have consumers who can buy multiple units (i.e., multiple washes),
A gas station is choosing among complex pricing strategies for its car washes. Since they have consumers who can buy multiple units (i.e., multiple washes), they are considering volume pricing. Suppose that the marginal cost of a car wash is positive and constant. The demand curve the gas station faces is downward sloping. Which of the following pricing strategies would you suggest? The gas station should implement a two-part pricing strategy, where the flat fee is equal to the area under the demand curve and above MC. All the strategies yield the same profit for the gas station (i.e., "all of the above"). The gas station should charge only a flat fee for unlimited car washes. O The gas station should charge more for the 10th car wash than for the 1st car wash. The gas station should implement a two-part pricing strategy, where the flat fee is equal to the area under the demand curve and above zero
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