Question
Need HELP with the following questions. I'm a bit hurry. Thanks! (*please don't round the intermediate values, rounded to 2 decimal places) There's a firm
Need HELP with the following questions. I'm a bit hurry. Thanks!
(*please don't round the intermediate values, rounded to 2 decimal places)
There's a firm faces two groups of customers in a market. The firm charges customers both aper-unit price(P) and a membership fee(F). The fixed costs of this firm are negligible and its marginal costs are equal to $5.
Group 1 has 40 members and a direct demand of Q1P1=1332P1.
Group 2 has 60 members and a direct demand of Q2P2=1062P2.
1.IF the firm is able to pricediscriminate, calculate theper-unit price(P) and membership fee(F) charged to each customer group. And then find thefirm's profits.
- Group 1. Per-unit price: ? Membershipfee: ?
- Group 2. Per-unit price? Membershipfee: ?
- Profits: ?
2.Then there's a law is passed that prevents the firm from price discriminating. What are theprofit-maximizing per-unit price and membership fee if they are based on the preferences of the consumers in Group2? :
- Per-unit price: ?
- Membershipfee: ?
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