Question

A price-searcher firm wants to try a two-part tariff. The firm's
marginal cost is a constant **$7** and it will charge
that as the per unit price. To complicate things, the firm has two
different groups of consumers. There are **30**
consumers who have a demand function given by:
**q _{D}=15.25-0.25P**. There are also

If the firm charges a fee that is too high, then it may lose all of the customers of the low-willingness-to-pay group. That could be bad for their producer surplus, but it might also be worth it depending on the number of consumers lost and the size of the higher fee.

Determine thee fixed fee that the firm would charge in order to maximize producer surplus in total

Answer #1

12. A price-searcher firm wants to try a two-part tariff. The
firm's marginal cost is a constant $3 and it will
charge that as the per unit price. To complicate things, the firm
has two different groups of consumers. There are
50 consumers who have a demand function given by:
qD=18-0.5P. There are also
20 consumers who have a demand function given by:
qD=18-0.5P.
If the firm charges a fee that is too high, then it may lose all
of...

3. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given by:
QD= 100 -5P.
Calculate the price the monopolist will charge.
(Do not include a dollar sign in your response. Round to the
nearest two decimals.)
4. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given...

Assume that consumers view tax preparation services as
undifferentiated among producers, and that there are hundreds of
companies offering tax preparation in a given market. The current
market equilibrium price is $120. Jojo’s Tax Service has a daily,
short-run total cost given by TC = 100 + 4Q2. Answer the
following questions:
How many tax returns should Jojo prepare each day if her goal is
to maximize profits?
How much will she earn in profit each day?
A perfectly competitive...

Assume that consumers view tax preparation services as
undifferentiated among producers, and that there are hundreds of
companies offering tax preparation in a given market. The current
market equilibrium price is $120. Jojo’s Tax Service has a daily,
short-run total cost given by TC = 100 + 4Q2. Answer the
following questions:
How many tax returns should Jojo prepare each day if her goal is
to maximize profits?
How much will she earn in profit each day?
A perfectly competitive...

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