Simone is the only provider of pumpkins for three cities. Because she has her own large garden, the marginal cost to produce an additional pumpkin is $0. As she knows, firms discriminate to improve profits. How much would her she earn in additional profit if she practiced price discrimination across cities, charging a different price in each city versus charging everyone a single price

Question

contestada

Respuesta :

batolisis batolisis · Answer 1 · 2021-05-07T16:21:57+02:00

Answer: hi your question has some missing data attached below is the missing table

answer : $9

Explanation:

If Simone practices price discriminations across cities i.e. charging different prices across city instead of charging a single price

To determine the additional profit we will apply the formula below

Profit made from charging different prices - profit made from charging a single price

= ( ( $11 * 4) + ( $9 * 4 ) + ( $10 * 5) ) - ( $11 * 11 units )

= $130 - $121

= $9

Note : For a single pricing system Simone will sell only 11 units at a unit price of $11

while for different pricing system Simone will sell 4 units in city A at$11 , 4 units in City B at $9 , 5 units in city C at $10