A Firm Sells Its Product to Two Groups of Buyers

question 56

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. If a firm is selling a product in two markets,A and B,and the marginal revenue in A is $25 and the marginal revenue in B is $20,the firm should

• A)charge a higher price in A where MR is higher
• B)charge a lower price in B where MR is lower
• C)sell more in B and less in A
• D)sell more in A and less in B
• E)both a and c

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Definitions:

Local Reach

The extent to which a business or service can impact or cover an area or community within a close geographic vicinity.

Place-Based Media

Advertising media that is located in specific places outside the home, such as billboards, transit ads, and digital signage, to reach target audiences in specific locations.

Bathroom Stalls

Partitioned enclosures found in public restrooms, designed to offer individuals privacy.

Media Habits

Patterns or behaviors exhibited by consumers in their consumption of media content across different platforms.