A profit-maximizing restaurant in a town has a constant marginal cost of $10 per lunch customer and can sell to two types of customers: retirees and non-retirees. The shop faces a demand by retirees given by QR- 100-4P and a demand by non-retirees given by QN- 110-3P. a. Which price would retirees pay under uniform pricing? b. Which price would retirees pay if the seller could successfully engage in price discrimination?

A profit-maximizing restaurant in a town has a constant marginal cost of $10 per lunch customer and can sell to two types of customers: retirees and non-retirees. The shop faces a demand by retirees given by QR- 100-4P and a demand by non-retirees given by QN- 110-3P. a. Which price would retirees pay under uniform pricing? b. Which price would retirees pay if the seller could successfully engage in price discrimination?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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