A Firm Sells Its Product to Two Groups of Buyers

question 12

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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Definitions:

Casual Observation

An informal method of gathering information based on spontaneous, non-systematic observations.

Direct Observation

A qualitative research method involving the systematic watching and recording of behaviors, events, or phenomena in their natural settings.

Traditional Thinking

Traditional thinking refers to ideas and beliefs that are handed down from generation to generation, often resistant to change and rooted in historical and cultural precedents.

Sociological Thinking

The process of questioning the obvious, examining societal patterns, and considering the social context of behaviour.