In a provincial town the only Internet service provider has a cost function TC (Q) = Q. In this town there are 200 Inter
Posted: Wed Apr 27, 2022 11:39 am
In a provincial town the only Internet service provider has a
cost function TC (Q) = Q. In this town there are 200 Internet
service users, each of them
which has a demand curve for Internet services q = 30 - 20P.
(a) Calculate the single price that maximizes the company's
profits, the quantity sold and the profits.
(b) If the company has the ability to follow bilateral invoicing
and set a price for the service of € 1.10 per day to calculate the
fixed monthly charge to be imposed, the
quantity sold and profits.
(c) What will be the best bilateral pricing in these circumstances?
Compare the profits with those of cases (a) and (b).
(d) In which of the above cases do we have the greatest loss of
well-being?
cost function TC (Q) = Q. In this town there are 200 Internet
service users, each of them
which has a demand curve for Internet services q = 30 - 20P.
(a) Calculate the single price that maximizes the company's
profits, the quantity sold and the profits.
(b) If the company has the ability to follow bilateral invoicing
and set a price for the service of € 1.10 per day to calculate the
fixed monthly charge to be imposed, the
quantity sold and profits.
(c) What will be the best bilateral pricing in these circumstances?
Compare the profits with those of cases (a) and (b).
(d) In which of the above cases do we have the greatest loss of
well-being?