Question
Consider North market with total demand P = 100 - Q N and South market with total demand P = 100 - Q S .
Consider North market with total demand P = 100 - QN and South market with total demand P = 100 - QS. Assume the marginal cost is 20 and that the firm is able to practice (first degree) block pricing (and prevent resale between the two markets). If there are 10 consumers in the South market and = 0.6, what block price would be charged to each consumer in the South market?
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Managerial Economics and Organizational Architecture
Authors: James Brickley, Clifford W. Smith Jr., Jerold Zimmerman
6th edition
73523143, 73523149, 978-0073523149
