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Suppose P = 20 2Q is the market demand function for a local monopoly. The marginal cost is 2Q. The firm currently uses a standard
Suppose P = 20 2Q is the market demand function for a local monopoly. The marginal cost is 2Q. The firm currently uses a standard pricing strategy. Which of the following will allow the firm to enhance the profits?
Multiple Choice
- Engage in commodity bundling.
- Engage in two-part pricing and engage in commodity bundling.
- Engage in randomized pricing.
- Engage in two-part pricing.
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