Determine the profit-maximizing uniform price and quantity

Reference no: EM133341629

Question: Demand for your firm's product behaves according to P=100-0.5QP=100-0.5Q. Marginal cost of your production is constant at $50.

a. Determine the profit-maximizing uniform price and quantity and calculate total profit.

b. Determine how much potential profit is left "on the table" due to charging only one price vs. perfect (1st degree) price discrimination.

c. Assume that you want to change your pricing such that consumers get discounts at each purchase of 25 units (one price for 0-25 units, another for 26-50 units, another for 51-75, etc.). What prices would you charge for each block of 25 units?

d. How much additional profit would be earned by block-pricing in this manner?

Reference no: EM133341629

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