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Hi all, I need help in solving the questions below, I hope you can help me. thanks 1. Trick or Treat Candy Company has lots

Hi all, I need help in solving the questions below, I hope you can help me. thanks

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1. Trick or Treat Candy Company has lots of customers, some of whom have an inverse demand of P = 160 lOQ, while another group of customers has an inverse demand curve of P = 120 , 5Q. Unfortunately, the owner, Hazel, does not know which customers are which until they buy. She knows that her marginal costs are constant at $25 and that she would like to use quantity discomting. a. Advise her as to the prices she should set. b. Is this price scheme incentive-compatible? 2. A sand and gravel company sells pea gravel. It faces two types of customers with the following inverse demand curves: Type A: P = 3.5 0.002Q Type B: P = 3 , 0.001Q where Q measures bags of pea gravel and P is the price per bag. The marginal cost is $0.50. a. Suppose the business wants to use discounting to price-discriminate. Calculate the price per bag and the price per bag with the quantity disc0unt. What minimum quantity will the rm set for the quantity discount? b. How much consumer surplus do Type A buyers receive from the regular price and the qua discount price? c. How much consumer surplus do Type B buyers receive from the regular price and the qua; discount price? d. Based on your answers to parts b and c, are the prices incentivecompatible

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