A Firm Sells Its Product to Two Groups of Buyers

question 16

Multiple Choice

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12) and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. Assuming the firm will serve both daytime and nighttime buyers,what is the MC_f function?

• A)MC_f = -1,800
• B)MC_f = -2,000
• C)MC_f = 8,000 - 250f
• D)MC_f = 7,500 + 200f
• E)none of the above

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