In Questions a Firm Sells Its Product to Two

question 45

Multiple Choice

In Questions 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.
-Now suppose the marketing director wishes to serve both daytime and nighttime buyers, what is the MR_f function?

• A) MR_f = 5,000 - 200f
• B) MR_f = 7,500 - 250f
• C) MR_f = 8,000 - 250f
• D) MR_f = 7,500 - 200f

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