A Firm Sells Its Product to Two Groups of Buyers

question 41

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. Suppose the marketing director ignores the nighttime market and wishes to extract all consumer surplus from the daytime buyers.By setting the optimal access charge and user fee,the firm will earn $_________ of profit on each one of the 50 daytime buyers.

• A)$1,872.
• B)$1,936.
• C)$7,744.
• D)$9,856.

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Definitions:

Transitivity

A mathematical property indicating that if a relation holds between A and B, and also between B and C, then it must hold between A and C.

Kohlberg's Theory

A theory of moral development proposed by Lawrence Kohlberg, suggesting that individuals progress through a series of stages of moral reasoning.

Conventional Level

A stage in Kohlberg's theory of moral development where individuals adhere to rules and norms to gain social approval or maintain social order.

Autonomous morality

A stage of moral development in which an individual's moral reasoning is based on personal principles and understanding of right and wrong.