Bob is the only carpet installer in a small isolated town. The above figure shows the demand curves of two distinct groups of customers-residential and business. If the marginal cost of installing carpet is a constant $1 per sq yard, what price does Bob charge each segment?
What will be an ideal response?
Setting MR = 1 in both markets yields a price of $5.50 in the residential market and $8 in the business market.
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Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that
A) the demand for personal trainers has increased. B) personal trainers are deliberately charging high prices because they provide services for wealthy clients. C) the number of personal trainers has increased. D) the law of demand has been violated.
What is a government attempting to do by charging a gasoline tax?
a. Reduce the number of free riders who use public roads b. Encourage private firms to develop public goods c. Discourage free riders from using toll roads d. Shift the demand for gasoline to reduce consumption