Two part pricing strategy

Reference no: EM1370622

You're the manager of monopoly. A typical consumer's inverse demand function for your firm's product is P=100-2Q and your cost function is C(Q)=20Q.

a. Find out the optimal two part pricing strategy.

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

Reference no: EM1370622

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