The testing center decides to start to use price discrimination to increase it\'
ID: 1157508 • Letter: T
Question
The testing center decides to start to use price discrimination to increase it's revenue. It develps a new policy: students must pay to take a test, and pay extra to take a test with scrap paper. The Testing Center discovers that there are two types of student consumers, those who are willing to pay more for their test with scrap paper, and those who are not. The consumers' demand functions are q=10-2p and q=15-5p. Find the price and quantity that the testing center will choose for each type of student.
Explanation / Answer
Demand function for q=10-2P
Demand function for q=15-5P
P
Q
TR
Q
TR
0
10
0
15
0
1
8
8
10
10
2
6
12
5
10
3
4
12
0
0
4
2
8
5
0
0
Price for demand function q=10-2p is $2
Price for demand function q=15-5p is $1
Demand function for q=10-2P
Demand function for q=15-5P
P
Q
TR
Q
TR
0
10
0
15
0
1
8
8
10
10
2
6
12
5
10
3
4
12
0
0
4
2
8
5
0
0
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