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: Incredible fun show times inc. produces Q unit of services. IT faces a demand curve of P=20-Q.It's total cost is given as . tThemarginal

: "Incredible fun show times inc." produces Q unit of services. IT faces a demand curve of P=20-Q.It's total cost is given as . tThemarginal cost is MC=2Q.

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[4 points] the profit maximizing firm: "Incredible fun show times mg," produces C1 unit of services. IT faces a demand curve of P=20-C1. It's total cost is given as TCCQ) = 10 + 02. tThemarginal cost is MC=2Q. a. Ifthe firm behaves as a profit maximizing firm (without price discrimination), what would be the profit maximizing equilibrium? (price and quantity) b. Ifthe firm can do first degree price discrimination, how many units would be sold? How much profit would the firm obtain? c. How much additional surplus will the firm capture (between a. and b.)? [6 points] You are the boss of "yikes my fries!" and you sell burgers and shakes. You face daily 3 consumers with the following WTP. Burger Shakes Bob 8 3 Jud 5 5 Ruddy 7 5 What is the profit maximizing price for burgers? (how much profit?) b. What is the profit maximizing price for shakes? (how much profit?) c. Ifthe firm was considering to offer burger and shakes as a meal instead of separately. What price should the firm set to maximize profits? Is it better then single pricing? d. What if it could offer, burgers, shakes and the combo: burger and shakes! What price should it set for all these items to maximize total profit? 9

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