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Posted: June 15th, 2022
Assume your typical customer has the demand function q = 20 – p and your marginal
Assume your typical customer has the demand function q = 20 – p and your marginal cost is MC = 10 dollars, as illustrated in the graph. Then, the optimal block pricing strategy isa) block size = 10 units and price per block = 50 dollarsb) block size = 10 units and price per block = 150 dollarsc) block size = 5 units and price per block = 75 dollarsd) block size = 5 units and price per block = 125 dollarsI am fairly certain it is either B or C. If someone could work it out for me, that’d be great. I have found it some where else online but I think the work may be incorrect.
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