What should it charge for group


Assume a company wants to 3rd degree price discriminate. The firm knows that one consumer subgroup's (Group 1) price elasticity is -6.4. The other group's (Group 2) price elasticity equals -2.0. Marginal production cost is $2.90 and there is no fixed cost. The firm charges $10 to group 1. What should it charge for group 2

Solution Preview :

Prepared by a verified Expert
Microeconomics: What should it charge for group
Reference No:- TGS0937078

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)