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Determine the optimal two-part pricing strategy

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Reference no: EM131757304

You are the manager of a monopoly. A typical consumer's inverse demand function for your product is P =220-40Q and your cost function is C(Q) = 20Q.

a. Determine the optimal two-part pricing strategy.

b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per unit price?

Reference no: EM131757304

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