In Questions a Firm Sells Its Product to Two

question 31

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.
-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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Definitions:

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented alongside an unconditioned stimulus.

Permanent Change

An alteration or transformation that is lasting and not reversible over time.

Nerve Fiber Patterns

The arrangement or distribution of nerve fibers within a specific area of the nervous system.

Physical Changes

Alterations in the physical state or appearance of a substance or organism that do not involve a change in its composition or identity.