You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P-350-20Q, and your cost function is CQ)=70Q. a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 70 Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price? $

You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P-350-20Q, and your cost function is CQ)=70Q. a. Determine the optimal two-part pricing strategy. Per-unit fee: $ 70 Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price? $

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section14.4: Price Discrimination

Problem 4QQ

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