Suppose a Firm Has Two Types of Customers but Cannot

question 41

Multiple Choice

Suppose a firm has two types of customers but cannot tell which type of buyer a customer is before a purchase is made. One group has an inverse demand of P = 100 - 10Q; another has an inverse demand curve of P = 110 - 22.5Q. The marginal cost of production is constant at $20. If the firm wanted to use quantity discounting, it should charge _____ per unit for any quantity purchased or _____ or more units.

• A) $65; $60 for 4
• B) $50; $40 for 8
• C) $25; $20 for 2
• D) $85; $75 for 6

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Definitions:

Numerator

The top number of a fraction.

Denominator

The bottom number of a fraction.

Medication Measurement

The process of determining the proper dose of a medicine, based on various factors such as the patient's condition, weight, and age.

Apothecary

A historical term for a healthcare professional who formulated and dispensed herbal remedies to physicians, surgeons, and patients.