A Firm Sells Its Product to Two Groups of Buyers

question 35

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. Should the firm bother to sell output to the nighttime market?

• A)Yes,because only $77,200 of profit is earned by serving only the daytime buyers.
• B)Yes,because only $137,200 of profit is earned by serving only the daytime buyers.
• C)No,because $240,000 of profit is earned by serving only the daytime buyers.
• D)No,because $300,000 of profit is earned by serving only the daytime buyers.

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Definitions:

Tissues

Groups of cells that perform a similar function and are the building blocks of organs and structures in the body.

Cardiovascular System

The system comprising the heart and blood vessels, responsible for circulating blood throughout the body to supply oxygen and nutrients.

Organization Level

Refers to the hierarchy in biological systems, ranging from atoms to biosphere, delineating the complexity and interaction levels.

Cytology

The study of cells, their structure, function, and chemistry, often used in medical diagnostics.