A local video store estimates its average customer's demand per year is Q = 7 ? 2P, and it knows the marginal cost of each rental is $0.5. How much should the store charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy?
A. $9
B. $10
C. $12
D. $11
Answer: A
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Mr. Blowfish opened a seafood store in December. He borrowed $60,000 from a bank at an annual interest rate of 8 percent. He used the funds he borrowed to purchase $60,000 of capital equipment. Over the year, he rented a building for $50,000 a year
During the first year of operation, Blowfish paid $45,000 to his employees, $20,000 for utilities, and $25,000 for raw fish he bought from other firms. In December of the next year, the market value of his capital was $50,000. Blowfish's best alternative to running the seafood store is to work for a grocery store as a sales clerk for $20,000 a year. a) What is the economic depreciation of Blowfish's capital? b) What are Blowfish's total opportunity costs? c) What is Blowfish's economic profit?
Which of the following is FALSE with respect to regulation?
A) Regulated firms commonly try to avoid the effects of regulation whenever they can. B) Firms engage in creative responses which conform to the letter of the law but undermine its spirit. C) Regulation has resulted in state laws that have made creative response illegal in many states. D) Recent regulations have generated feedback effects that undermined the key aim of the rules.
Consumption or household spending of an economy comprises of both consumer spending and business spending
a. True b. False Indicate whether the statement is true or false
Which of the following mechanisms helps output to return to potential after a supply shock?
a. A change in the nominal wage b. Changes in business decision making strategies c. Changes in the capital stock d. The rigidity of the price level e. Changes in inventories