(SOLVED) You are selling two goods 1 and 2 to a

You are selling two goods 1 and 2 to a You are selling two goods, 1 and 2, to a market
consisting of three consumers with reservation prices as follows: The unit cost of each product
is $30. a. Compute the optimal prices and profits for (i) selling the goods […]

Suppose that the marginal costs c1 and c2 were zero Suppose that the marginal costs c1 and
c2 were zero. Show that in this case, pure bundling, not mixed bundling, is the most profitable
pricing strategy. What price should be charged for the bundle? What will the firm’s profit be? […]

Look again at Figure 11 12 p 420 which shows the Look again at Figure 11.12 (p. 420), which
shows the reservation prices of three consumers for two goods. Assuming that marginal
production cost is zero for both goods, can the producer make the most money by selling the
goods […]

Why is the pricing of a Gillette safety razor a Why is the pricing of a Gillette safety razor a form
of two-part tariff? Must Gillette be a monopoly producer of its blades as well as its razors?
Suppose you were advising Gillette on how to determine the two parts […]

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When pricing automobiles American car companies typically charge a much When pricing
automobiles, American car companies typically charge a much higher percentage markup over
cost for “luxury option” items (such as leather trim, etc.) than for the car itself or for more
“basic” options such as power steering and automatic […]

Show why optimal third degree price discrimination requires that marginal revenue Show why
optimal third-degree price discrimination requires that marginal revenue for each group of
consumers equals marginal cost. Use this condition to explain how a firm should change its
prices and total output if the demand curve for one […]

Give some examples of third degree price discrimination Can third degree price Give some
examples of third-degree price discrimination. Can third-degree price discrimination be effective
if the different groups of consumers have different levels of demand but the same price
elasticities? Give some examples of third degree price discrimination Can […]

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