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There two types of consumers for rental cars: (i) students, with individual demand Qs=502P; non-students, with individual demand Qn=702P. Suppose there are twice as many
There two types of consumers for rental cars: (i) students, with individual demand Qs=502P; non-students, with individual demand Qn=702P. Suppose there are twice as many students as non-students. The rental company is a monopoly and has a constant marginal cost of 5 per unit of quantity. Find the optimal two-part tariff (per unit price P and fixed fee f) for the rental company.
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