Optimal prices for the high-value and low-value groups

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Suppose there are 10 individuals who value a good at {$10, $9, $8, $7, $6, $5, $4, $3, $2, $1}. If the MC is $1.50, what is the optimal price? Calculate the number of units that are sold, total revenue and total profits. Secondly, use the numbers above, but now assume that the low-value individuals can be accurately identified, and these low-value individuals are the ones with values of {$5, $4, $3, $2, $1}.Calculate the optimal prices for the high-value and low-value groups. Report the total profit, and also how much of the profit comes from each group.

Reference no: EM131004582

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