Using math, show why, under two-part pricing, customers who purchase fewer units pay more on average per unit than do customers who buy more units.
Answer to relevant QuestionsKnoebels Amusement Park in Elysburg, Pennsylvania, charges an access fee, A, to enter its Crystal Pool. It also charges p per trip down the pool’s water slides. Suppose that 400 teenagers visit the park, each of whom has a ...A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has no variable production cost. Through the magic of focus groups, their ...Many retail stores offer to match or beat the price offered by a rival store. Explain why firms that belong to a cartel might make this offer.A homogeneous- good duopoly faces an inverse market demand of p = 120 – Q. Firm 1 has a constant marginal cost of MC1 = 20. Firm 2’s constant marginal cost is MC2 = 30. Calculate the output of each firm, market output, ...If firms produce identical products and have the same constant marginal cost, m, explain why the Nash- Bertrand equilibrium price and market quantity are the same regardless of whether there are two or more firms.
Post your question