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Determine the optimal two-part pricing strategy

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You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P = 350 -20Q, and your cost function is C(Q) = 150Q.

a. Determine the optimal two-part pricing strategy.

Per-unit fee: $

Fixed fee: $

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: EM133064368

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