A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer's demand for the product is Q = 80-0.5P, and the marginal cost of production is $ 100. a) Determine the optimal number of units to put in a package. b) How much should the firm charge for this package? c) How much additional profit does the company earn compared with charging this consumer a per-unit price?
A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer's demand for the product is Q = 80-0.5P, and the marginal cost of production is $ 100. a) Determine the optimal number of units to put in a package. b) How much should the firm charge for this package? c) How much additional profit does the company earn compared with charging this consumer a per-unit price?
Chapter8: Monopoly
Section: Chapter Questions
Problem 4SQ
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a) Determine the optimal number of units to put in a package.
b) How much should the firm charge for this package?
c) How much additional profit does the company earn compared with charging this consumer a per-unit price?
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