What quantity will the customer demand at market price find

Reference no: EM13390980

The individual demand for a slice of pizza is given by QD = 6 - P. Assume the marginal cost of a slice of pizza is constant at $1.00 and the marginal revenue (MR) function is 6 - 2Q.

a. What is the profit-maximizing price and quantity if the seller sells all slices at a single price?

b. Suppose that the seller decides to sell pizza at cost and charge a fixed price for this option. What quantity will a customer demand at the market price? What is the maximum fixed price the seller can charge for this option? Discuss the value of this seller's pricing strategy.

Reference no: EM13390980

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