You are running your own business, and you estimate that each individual customer has the following demand curve:

P = 50 - 5Q

Your costs are constant at $10 per unit.

Given the above information, answer each question for each pricing strategy:

A. Assume you charge the same price to each customer.

What is your profit maximizing price?

What is the quantity each customer will purchase?

What is your profit per customer?

B. Assume you use 2-part pricing for each customer.

What is your profit maximizing price?

What is the quantity each customer will purchase?

What is the fixed fee you will charge?

What is your profit per customer?

C. Assume you use block pricing.

What is your package size?

What is your package price?

What is your profit per customer