Question

A local video store estimates their average customer's demand per year is Q = 7 – 2P, and knows the marginal cost of each rental is $0.5

A local video store estimates their average customer's demand per year is Q = 7 – 2P, and knows the marginal cost of each rental is $0.5. How much should the store charge for each rental if it engages in optimal two-part pricing?
Answer

A. $0.35
B. $0.5.
C. $0.7.
D. $1.00.

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