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Question 11 3 pts The following diagram illustrates two-part pricing with different consumers, Valerie and Neal. Assume that the firm is required to charge the
Question 11 3 pts The following diagram illustrates two-part pricing with different consumers, Valerie and Neal. Assume that the firm is required to charge the same access fee and per unit price to both consumers. Assume these are the only two consumers and that the firm maximizes profit. The marginal cost of production is $10. (a) Valerie (b) Neal 5 100 p, $ per unit p, $ per unit 80 D2 D1 A2 = $3,200 A, = $1,800 C1 = $50 C2 = $50 20 B, = $600 EX B. = $800 10 MC 10 . MC 60 70 80 80 90 100 Q1, Units per day Q2: Units per day O The deadweight loss under profit-maximizing two-part pricing is $100. O The firm generates the same profit under profit-maximizing two-part pricing as with perfect price discrimination. Charging a per-unit price of $20 and an access fee of $3,200 maximizes profit for the firm. O Charging a per-unit price of $10 and an access fee of $2,450 maximizes profit of the firm
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