The publisher of an online economics primer course is trying to sell the primer

Question

The publisher of an online economics primer course is trying to sell the primer to a group of MBA students and a group of EMBA students in the US. The maximum willingness to pay for the primer in each group of students as well as the number of students in each group is given in the table below. Assume the marginal cost is $50.

What is(are) the publisher's profit maximizing price(s)?

a. charge $300 to EMBA and $100 to MBA

b. charge either $300 or $100 (the publisher is indifferent)

c. charge a uniform price of $300

d. charge a uniform price of $100

Explanation / Answer

This is MC=MR for each group

EMBA
MR=$300
MC=50
300/50=6=P

MBA
MR=$100
MC=50
100/50=2=P

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