Suppose two types of consumers buy suits. Consumers of type A will pay $100 for

Question

Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat, and $50 for pants. Consumers of type B will pay $75 for a coat, and $75 for pants. The firm selling suits faces no competition and has a marginal cost of pants of $10. If the firm can identify each consumer type and can price discriminate, what is the optimal price for a pair of pants?

A. Charge type A consumers $50, and type B consumers $75. B. Charge both types $150. C. Charge both types $75. D. Charge type A consumers $50, and type B consumers $50.

Explanation / Answer

D. Charge type A consumers $50, and type B consumers $50

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.