ak-II IIIIGI I Iuu- W As a business consultant, you have been hired by a small .0 sneaker manufacturer whose goal is to produce sneakers with sustainably source material and ethical labor practices. The graph shows the demand and marginal revenue (MR) curves faced by the company for two diiferent groups of consumers. They can produce a pair of sneakers for a constant marginal cost (MC) of $20/pair, can identify varying consumer groups,._ and they have no xed costs. Use the graph to answer the questions. What price should the company charge? 0 They should price discriminate and charge $100/pair and $20/pair. ' 0 They should shutdown in the short run because he will not be able to cover his variable costs of $10,000. 0 They should price discriminate and charge $60/pair and $70/pair. 0 They should produce where MR = MC and charge $20/pair. .$100 Price per pair 90' 80 70 60 50 40 30 Supply=MC 20 MR2 10 Demand2 0 100 200 300 400 500 600 700 800 900 1000 Pairs of shoes per week

As a business consultant, you have been hired by a small sneaker manufacturer whose goal is to produce sneakers with sustainably source material and ethical labor practices. The graph shows the demand and marginal revenue (MR) curves faced by the company for two different groups of consumers. They can produce a pair of sneakers for a constant marginal cost (MC) of $20/pair, can identify varying consumer groups, and they have no fixed costs. Use the graph to answer the questions. Price per pair . $100 90 80 70 70 60 50 09 50 40 40 What price should the company charge? They should price discriminate and charge $100/pair and $20/pair. They should shutdown in the short run because he will not be able to cover his variable costs of $10,000. O They should price discriminate and charge $60/pair and $70/pair. They should produce where MR = MC and charge $20/pair. 30 20 20 120 MR 2 10 Demand 2 0 MR 1 Supply=MC Demand 1 100 200 300 400 500 600 700 800 900 1000 Pairs of shoes per week