Reference no: EM133629866

You are an executive for Rent.com, which rents out computers to college students and small businesses. The company receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. The company has 10 pop-and-mom businesses and 10 community colleges in its customers portfolio. Each business has the demand function Q = 10 - P, where Q is in millions of seconds per month; each community college has the demand Q = 8 - P. The marginal cost to Rent.com of additional computing is 2 cents per second, no matter what the volume. Suppose that you could separate both types of customers. Group of answer choices With a two-part tariff, each community college will yield a profit of $180,000 per month and each local small business will yield a profit of $320,000 per month. With a two-part tariff, each community college will yield a profit of $320,000 per month and each local small business will yield a profit of $180,000 per month. With a two-part tariff, each community college will yield a profit of $120,000 per month and each local small business will yield a profit of $300,000.