Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. If the firm can identify each consumer type and can price discriminate, what is the optimal price for a pair of pants?
A. Charge type A consumers $50, and type B consumers $75.
B. Charge both types $150.
C. Charge type A consumers $50, and type B consumers $50.
D. Charge both types $75.
Answer: A
Economics
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