Compare the profits under the two pricing strategies

Assignment Help Macroeconomics
Reference no: EM131056396

Suppose you are the manager for a firm that has a monopoly on the product you produce and sell. Market research has shown that the demand by a typical customer for the product you sell is given by:

Assume you have no fixed costs. From your production department, you are told that the variable costs of production are given by:

a. If you decide to offer the product for sale to all buyers at a single price, what price will you charge and how much will you sell to a typical customer?

b. What profits per consumer will the firm earn under this pricing strategy?

c. Now suppose you decide to use a simple block pricing strategy whereby you offer your product as a single package of a predetermined number of units. How much will you sell to a typical customer? (Hint: What is the optimal bundle size?)

d. What price per consumer will the firm charge under this pricing strategy?

e. Compare the profits under the two pricing strategies. Comment on the comparison.

Reference no: EM131056396

Questions Cloud

Assignment on operations decision : Using the regression results and the other computations from Assignment 1, determine the market structure in which the low-calorie frozen, microwavable food company operates.
About to circuit board capacitors : Circuit board capacitors. Use the data of Table 2.1, but omit the data on board 4. (a) Calculate the pooled estimate  of the assumed common value of the binomial proportion.
Is link between quality and cost any different in business : Is the link between quality and cost any different in business as compared to healthcare; why or why not?
Calculate the test statistic : (a) Calculate a pooled estimate  of their assumed common true failure rate. (b) Calculate the test statistic (1.7). How many degrees of freedom does it have? Look up the 95 and 99% points of the corresponding chi-square distribution.
Compare the profits under the two pricing strategies : Suppose you are the manager for a firm that has a monopoly on the product you produce and sell. Market research has shown that the demand by a typical customer for the product you sell is given by:
Write an echo server that handles both tcp and udp clients : To do this, the server must create both a listening TCP socket and a UDP socket, and then monitor both sockets using one of the techniques described in this chapter.
Characteristics of some renewable resources : However, the reputable presumption for some renewable resources is precisely the opposite. What general characteristics of some renewable resources bring this about?
Binomial acceptance sampling : Binomial acceptance sampling. For binomial acceptance sampling , calculate (using binomial tables) and plot the OC curve for
Create a comprehensive behavioral plan : Choose a child you for whom you will create a comprehensive behavioral plan. Complete a one-page paper that contains - In the first section, introduce your subject.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Competition in an oligopoly than other forms of market

Evidence suggests that there is less price competition in an oligopoly than other forms of market structure. Why is this the case?

  What will be the effect of change in policy

What will be the effect of this change in policy on both the real and the nominal interest rate in the long - run?

  Rise in the price of tv sets in japan also depreciation

Rise in the price of TV sets in Japan also depreciation of the dollar lead to a total increase of 9 percent in the dollar price of imported.

  1 a relaxation of us immirgration laws and regulations

1. a relaxation of u.s. immirgration laws and regulations woulda. further reduce wages in poorer countriesb. turn

  Determine the accounting cost function

University of Florida engineering students are planning operating a mobile car clinic in Gainesville, Florida, during their summer break. This is an option to summer employment stacking plastic cups

  Possible scenarios of supply and demand

Assume you are the manager of a California winery. How would you expect the following events to affect price you will receive for a bottle of wine?

  Explain why is private property and the protection of proper

Explain why is private property and the protection of property rights, so crucial to the success of the market system.

  What would be the estimated value for the average increase

Y = 20000 + 4000X. What would be the estimated value for the average increase in income from going to college for four years versus going to work directly out of high school?

  How much should be a surplus or deficit

You are Secretary of the Treasury Jack Lew. It's six months into Obama's second term as president and you receive some estimates of national accounts numbers you plan to report to the President in a cabinet meeting. Under one set of expectations..

  How to determine the optimal level of pollution

Give me some information on taxing pollution. Discuss it using the ideas of externality, supply, and demand. How do we determine the optimal level of pollution? Is the optimal level of pollution zero Why or why not

  Calculating profit maximizing price-output combination

In the US, steel production has remained constant since the 1970s at about 100 million tons per year. Large integrated companies, like United State Steel, remain important in the industry, but roughly 50%.

  It has been a tough year in the poultry business with

it has been a tough year in the poultry business with supply outpacing demand and feed-grain prices rising

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd