The average consumer at a firm with market power has an inverse demand function of P 10 - Q. The firm's total cost function isC = 3Q. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer?Multiple Choice$75.50$24.50$64.50$32.50

A firm engages in two-part pricing charges two prices, i.e., per unit price and fixed fee. Per…

The average consumer at a firm with market power has an inverse demand function of P 10 - Q. The firm's total cost function is C- 30. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer? Multiple Choice $75.50 $24.50

The average consumer at a firm with market power has an inverse demand function of P 10 - Q. The firm's total cost function is C- 30. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer? Multiple Choice $75.50 $24.50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The average consumer at a firm with market power has an inverse demand function of P 10 - Q. The firm's total cost function is
C = 3Q. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer?
Multiple Choice
$75.50
$24.50
$64.50
$32.50

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