What is the value of t that yields the highest profits

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Reference no: EM13198910

A firm has estimated that the demand for its product comes from two types of customers, I and II. Each type I customer (there are 25 of them) has a demand curve given by Q=12-P, while each type II customer (there are 30 of them) has a demand curve given by Q=9-P. The firm's marginal cost is constant and equal to $3. Suppose the firm wants to use a two-part pricing strategy (T,P), and it has decided to set P= $3. With P= $3, the what is the value of T that yields the highest profits.

Reference no: EM13198910

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