Suppose you are the owner of the only widget store in town. You purchase your widgets from the manufacturer at $50 apiece. Inside your store, you charge a single price for widgets; you can also charge an admission fee to enter the store. Your two customers, Adam and Eve, have the following demand curves:

(The labels in the triangles stand for areas, measured in dollars.) Assume you are committed to keeping both of your customers. Is it best to price your widgets at $40, $50, or $60?Why?

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Price ($ per widget) Price ($ per widget) 800 300 60 50 40----44 50 --」75 50 75 Quantity (S per widget) Quantity ($ per widget) 40 50 60 30 45 60 Adam's demand for widgets Eve's demand for widgets