Y5

Continuing from problem 2, suppose Frank's colleague Ralph retires and gives Frank his customers, all of whom have higher demand than Frank's existing customers. Frank's customers are now divided equally between a "High Demand" and "Low-Demand" clientele: Low-Demand customers: P=200.25 *Q ; High-Demand customers: P=22.500.25 *Q Assume that Frank wants to quote all of his customers the same terms. Among the choices offered below, which pricing strategy generates the most profits? a. Charge a flat price for each hour. b. Charge an up front fee for the first hour of work, and then offer as many hours as the customer wants at no additional charge. c. Charge an up front fee for the first hour of work, and then $10 per hour for all additional work. d. Charge an up front fee for the first hour of work, and then slightly more than $10 per hour for all additional hours of work. e. Cannot tell with the information given.