Suppose SUCell, a wireless network operator, serves three distinct customers segments in the market. Each segment...

 

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Suppose SUCell, a wireless network operator, serves three distinct customers segments in the market. Each segment is of equal size. The demand curve for each segment's monthly demand is given by: Segment 1 2 3 Demand (in hours) D(p)= 60-20p D(p)= 70-30p D(p) = 50-8p Where p can define as the price charged for each hour of usage, also assume that it costs SUCell 30 cents to provide each hour of cell phone usage. Part a (25 points). If SUCell offers the same price for each hour of usage, what will be the profit-maximizing price level? Conduct your analysis in the "Question 2 - Part a" sheet of the MS Excel file "Assignment 4.xlsx". Part b (25 points). Determine the profit-maximizing two-part tariff scheme for the company. By what percentage does this nonlinear pricing policy enhance the profit over the benchmark case where the firm extends the same price for each hour of usage? Conduct your analysis in the "Question 2 - Part b" sheet of the MS Excel file "Assignment 4.xlsx". Suppose SUCell, a wireless network operator, serves three distinct customers segments in the market. Each segment is of equal size. The demand curve for each segment's monthly demand is given by: Segment 1 2 3 Demand (in hours) D(p)= 60-20p D(p)= 70-30p D(p) = 50-8p Where p can define as the price charged for each hour of usage, also assume that it costs SUCell 30 cents to provide each hour of cell phone usage. Part a (25 points). If SUCell offers the same price for each hour of usage, what will be the profit-maximizing price level? Conduct your analysis in the "Question 2 - Part a" sheet of the MS Excel file "Assignment 4.xlsx". Part b (25 points). Determine the profit-maximizing two-part tariff scheme for the company. By what percentage does this nonlinear pricing policy enhance the profit over the benchmark case where the firm extends the same price for each hour of usage? Conduct your analysis in the "Question 2 - Part b" sheet of the MS Excel file "Assignment 4.xlsx".

Answer rating: 100% (QA)

Part a To find the profitmaximizing price level we need to determine the total demand and total cost functions for all segments The total demand for e... View the full answer