Assume that individuals have identical preferences and that each has a demand curve for internet services...

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Assume that individuals have identical preferences and that each has a demand curve for internet services of the following form: P = 53 - 2Q where P is the price per hour and Q is hours per month. Assume the firm has a constant marginal cost of $10. How much profit does the firm earn from charging a profit-maximising two- part tariff to each consumer? [Round your answer to 2 decimal points when necessary] Assume that individuals have identical preferences and that each has a demand curve for internet services of the following form: P = 53 - 2Q where P is the price per hour and Q is hours per month. Assume the firm has a constant marginal cost of $10. How much profit does the firm earn from charging a profit-maximising two- part tariff to each consumer? [Round your answer to 2 decimal points when necessary]

Answer rating: 100% (QA)

To maximize profit the firm will set price equal to marginal cost in the second part of the tariff G... View the full answer