Question
Suppose a monopolist knows that it has two types of customers, high demand ones and low demand one, but cannot distinguish who is in what
Suppose a monopolist knows that it has two types of customers, high demand ones and low demand one, but cannot distinguish who is in what group. The demand curve for the high demand customers is P = 20 - Q and the demand curve for the low demand curve is P = 12 - 2Q. The marginal cost of the product the firm is selling is 2. Assume that there are the same number of customers in each group.
The firm wants to maximise profits.
Which of the following statements is correct?
A. | The firm should charge an entry (fixed) fee of 25 and a unit fee of 2. | |
B. | The firm should charge an entry (fixed) fee of 162 and a unit fee of 2. | |
C. | The firm should charge an entry (fixed) fee of 324 and a unit fee of 2. | |
D. | The firm should charge an entry (fixed) fee of 50 and a unit fee of 2. |
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