Question: Use the information provided below for Questions 6 7 , 6 8 , and 6 9 . A firm faces two groups of customers with
Use the information provided below for Questions and
A firm faces two groups of customers with different market demand functions:
A strong demander: Ps Qs
A weak demander: Pw Qw
For simplicity, we assume there is only one strong demander and one weak
demander, the firms marginal cost is $ with no total fixed cost. The firm uses a twopart pricing strategy.
If the firm assumes that both strong and weak demanders are in the market and the products price P equals its marginal cost MC what will be the firms total profit?
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