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Question 3: Non-linear pricing (Type 2 PD) Hint: to do this vou will need to go through the rigorous calculus based approach in some detail
Question 3: Non-linear pricing (Type 2 PD) Hint: to do this vou will need to go through the rigorous calculus based approach in some detail - that is, slides 41-47 of Lecture 2 (Saravia Lecture 1.29.24.pdf), which we also reviewed on 2.5.24. Let there be two types of consumer. Type A has utility given by 12q p. Tvpe B has utility given by 54p, where g is a numerical index of quality and # is the price of a unit. There are three times as many Tvpe B's as there are Type A's. The total number of consumers is 400. The marginal cost of serving each individual consumer's purchase is 4. This means the total variable cost of serving a consumer is equal to 242. The firm must also incur a fixed cost of production equal to F. Given that the firm cannot distinguish a Tvpe A from a Type B, would the firm want to operate if F = 1000
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