Top Posters
Since Sunday
L
3
d
3
y
3
a
3
n
3
d
3
e
3
d
3
c
3
p
3
M
3
a
3
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 326 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
Thanks for your help!!
rene_ram97
wrote...

Yesterday
Thank you, thank you, thank you!
patod1
wrote...

2 hours ago
Brilliant ツ
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1242 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 88
  
 349
  
 258
Your Opinion
Where do you get your textbooks?
Votes: 447
Previous poll results: Which is the best fuel for late night cramming?