firm sells its product to two groups of buyers: daytime buyers and nighttime buy
ID: 1121485 • Letter: F
Question
firm sells its product to two groups of buyers: daytime buyers and nighttime buyers. There are 50 daytime buyers all of whom have identical de are 50 nighttime buyers, all of whom have identical demands given by DN in the figure below. The firm's variable costs are constant (SMC- AVC marketing director must devise a two-part pricing plan that will maximize the firm's profit 100 100 0;A-100 . 0.5a 12 12 SMC AVC 200 100 Quantity Panel A·One Daytime buyer's demand Panel B- One Nighttime buyer's demand To maximize profit a price discriminating fim should O produce the output at which total marginal revenue equals marginal cost allocate the optimal output so the elasticity is the same in each market. allocate the output so that marginal revenue is the same in each market.Explanation / Answer
Answer:- To maximize profit a price discriminating firm should
Correct Answer:-
allocate the output so that marginal revenue is the same in each market.
produce the output at which total marginal revenue equals marginal cost.
P.S.:- there are two correct answers for this questions as mentioned above. But as in the picture there is only one option out of these two is provided thus you can select the first one.
Answer:- If a firm is selling a product in two markets, A and B and the marginal revenue in A is $25 and the marginal revenue in B is $20, the firm should
Correct Answer:- Sell more in A and less in B
Answer;- What rule do you follow for price discrimination for a firm that practices price discrimination
Correct Answer:- Price is lower in the high elasticity market.
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