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Question about two part pricing strategy
need assistance
A store estimates their average customer's demand per year is Q = 20 - 4P, and knows the marginal cost of each rental is $1.00. How much should the store charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy?A. $20B. $32C. $40D. $64
Please show calculations
Plot both together on a supply-demand graph. Calculate the equilibrium P and Q, and show them on your graph as well. Also calculate CS (consumer surplus) at the equilibrium.
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