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Consider the following market, in which four people each have a different willingness to pay for a Penn State jacket. Willingness to Pay for a
Consider the following market, in which four people each have a different willingness to pay for a Penn State jacket. Willingness to Pay for a Penn State Jacket Person Willingness to Pay Frank $12 Ginny $17 Hampton $22 Izzy $32 If the firm CANNOT price discriminate and must charge the same price for each unit, what price should it choose to maximize revenue? Hint: Remember that total revenue is . At each possible price, think about the quantity purchased, and then find total revenue. The single price the firm should charge for each Penn State sweatshirt is $ . Do not include the dollar sign ($) in your answer. Now suppose the firm is able to use perfect price discrimination. What will be the total revenue earned by the firm? Do not include the dollar sign ($) in your
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