Problem
Suppose a supplier can identify two distinct groups of customers, students and non-students. The demand by students q_s and the demand by non-students q_n are given by q_s = 100 - 8p_s and q_n = 100 - 4p_n The total demand is q_t = q_s + q_n, and then q_t = 200 - 12p_t The supplier's cost of exist 2 per unit is constant regardless of the number of units supplied.
(a) What price maximizes profits if the firm charges everyone the same price? Explain why!
(b) Can the firm secure greater profits by charging different prices for the two groups than it can secure by charging everyone the same price? Motivate your results by calculation and explanation in words.
(c) Explain the demand curves, the marginal revenue curves, the marginal cost curve and highlight the equilibria, if possible, draw graphs to support your discussion.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.