Assume firm sells its products to identical customers and

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Reference no: EM13393033

Suppose a firm sells its products to identical customers and each of them has the following demand for its product: P=40-Q. Further assume that the marginal cost to produce the product is $5. The fim is thinking of implementing the two part pricing technique: charge consumers an "entrance" fee and then charge $5 per each unit the consumers consume.

Under this scenario,

A. What would be the entrance fee for each consumer?

B. What would be the producer surplus per each customer?

Reference no: EM13393033

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