This paper circulates around the core theme of The firm is considering a quantity discount. The first 400 units can be purchased at a price of $120, and further units can be purchased at a price of $80. How many units will the consumer buy in total? together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Suppose that
individual demand for a product is given by Q = 1200 – 5P. Marginal revenue
is
MR = 200 – 0.4Q, and marginal
cost is constant at $ 20. There are no fixed costs.
a. The firm is
considering a quantity discount. The first 400 units can be purchased at a
price of $120, and further units can be purchased at a price of $80. How many
units will the consumer buy in total?
b. Show that this
second- degree price- discrimination scheme is more profitable than a single
monopoly price.