Top Posters
Since Sunday
o
1
1
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
nakungth nakungth
wrote...
Go to Answer
Posts: 1175
Rep: 3 0
6 years ago
The Tire Shed is a regional chain that sells tires and other automobile parts.  The company sells its own brand of tires under a block pricing scheme that charges $100 per tire if the customer buys one or two tires and $75 per tire if the customer buys three or four tires.  The monthly demand curve facing the typical store is Q = 1000 - 4P, and the marginal cost of the tires is constant at $40 per tire.

a.   What are the monthly profits for the typical store under the block pricing scheme?  What is the consumer surplus enjoyed by customers of the typical store?
b.   Suppose the firm is considering a uniform pricing scheme with P = $90 per tire.  How does the firm profit and consumer surplus under uniform pricing compare to the profit and consumer surplus outcomes under block pricing?
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
Read 315 times
1 Reply
Replies
Answer verified by a subject expert
boransalboransal
wrote...
#1
Posts: 477
Rep: 13 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 160 words.
1

Related Topics

nakungth Author
wrote...

6 years ago
Brilliant ツ
Natalie Price
wrote...

Yesterday
Smart ... Thanks!
Katey_maree
wrote...

2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  894 People Browsing
 139 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 38
  
 314
  
 110
Your Opinion
Which country would you like to visit for its food?
Votes: 215
Previous poll results: Who will win the 2024 president election?