(Figure: Type A and Type B I) Suppose a firm plans to use indirect price discrimination through quantity discounts. The firm cannot identify which customers are Type A or Type Bbefore the purchase, so the firm would like to offer a regular-price plan and a quantity-discount plan to suit the customers' personal price sensitivity.Type APrice (S) 3-Price (S) 432-1035604MR1 2 3 4 5 6 7DMC8 9 10Quantity2.5021The minimum number of units customers should have to buy to get the discount is0Type BMCMR2 4 6 8 10 12 14 16 18 20 22 24QuantityD

Price discrimination refers to a situation in which a seller or provider charges different prices…

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Business

Economics

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

(Figure: Type A and Type B I) Suppose a firm plans to use indirect price discrimination through quantity discounts. The firm cannot identify which customers are Type A or Type B
before the purchase, so the firm would like to offer a regular-price plan and a quantity-discount plan to suit the customers' personal price sensitivity.
Type A
Price (S) 3-
Price (S) 4
3
2-
1
03
5
6
0
4
MR
1 2 3 4 5 6 7
D
MC
8 9 10
Quantity
2.50
2
1
The minimum number of units customers should have to buy to get the discount is
0
Type B
MC
MR
2 4 6 8 10 12 14 16 18 20 22 24
Quantity
D

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