The work for the first question is below. I need help with the second question, in the second picture provided. What should the retainer fee be?
A lawyer has two clients. She charges a yearly retainer plus a separate fee for each consultation. The retainer is a fee each client pays just to secure the services of the lawyer for the following year. and the consultation fee is the price the lawyer charges to do one legaljob for the client. The clients' annual demand curves for legal jobs are Client 1: 01 =21 P Client 2: 02: 18213 where P is the consultation fee in thousands of dollars for one legaljob and Q,- is the number of legal jobs done for client i. The lawyer's marginal cost for completing one legal job is 2.2 (also in thousands of dollars]. The lawyer wants to determine the fee schedule (retainer and consultation fee) that will maximize her prot. She feels she cannot use a different fee schedule for each client, so she must set one retainer and one consultation fee that apply to both clients. She should charge a consultation fee of $ 4.8 thousand per legal job. {Enter your response rounded to two decimal places. ,1 She should charge a retainer of EEG thousand. (Enter your response rounded to two decimal places. J rohitash.gujjar01 Answered 2 days ago The consultation fee should be charged is $4.8 thousands per legal job. Explanation: Given client's annual demand curves: Client 1: Q1= 21- P Client 2: Q2= 18-2P P= 1/ 2*( 9- P)* Q2 Calculate total revenue of both the clients: TR1= r+ (P* Q1) = 1/ 2* (9- P)* Q2+ P*( 21- P) TR2= r+ (P* Q2) = 1/2* (9- P)* Q2+ P* (18- 2P) Calculate the total profit: Profit= TR1+ TR2- MC* (Q1+ Q2) = ((1/ 2* (9- P)* Q2+ P*( 21- PD)+ (1/2* (9- P)- Q2+ P* (18- 2P)))- (2 2* ((21- P)+ (18-2PM) = = (0/ 2* (9- P)* Q2+ P*( 21- PD)+ (1/2* (9- P) Q2+ P* (18- 2P)))- (2.2* (39-3P)) = 2* (1/ 2)* (9- P) Q2+ P* (21- P)+ P* (18- 2P)- (2 2* (39-3P)) = (9- P)* (18- 2P)+ 21P- P 2+ 18P- 2P 2- 85.8+ 6.6P = 2* (9- P)* (9- P)+ 45.6P- 3P 2- 85.8 = 2* (9- P)* 2+ 45.68- 3P 2- 85.8 Total profit is 2* (9- P)* 2+ 45.6P- 3P*2- 85.8 Differentiate with respect to P: ap = 2* 2* (9- P)- 1+ 45.6- 6P=0 -36+ 4P+ 45.6- 6P= 0 9.6-2P= 0 2P= 9.6 P= 9.6/ 2 = 4.8