Using the Same Information as Above and Assuming Marginal Cost

question 131

Multiple Choice

Using the same information as above and assuming marginal cost is negligible,what is(are) the profit maximizing price(s) ?

• A)Charge $300 to EMBA and $100 to MBA
• B)Charge either $300 or $100 (the publisher is indifferent)
• C)Charge a uniform price of $300
• D)Charge a uniform price of $100

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Definitions:

European Calls

Options contracts that allow the buyer to purchase a stock or asset at a specific price on or before the expiration date, but only on that date.

Expiration Date

The final date by which an option or other financial instrument must be exercised or becomes void.

Call Option

An agreement that grants the purchaser the flexibility, without the necessity, to acquire a stock, bond, commodity, or different asset at an agreed price during a definite timeframe.

Fixed Price

A specific price point that does not change over time, often set for products, services, or agreements.