Microeconomics
Suppose you have a firm that produces a product that is indivisible at a constant
marginal cost of £42. Currently, you have 12 customers. Each of them buys at most
one unit of the product. Below are the valuations that these customers have;
£30, £36, £45, £48, £51, £57, £66, £75, £78, £81, £90, £93
a) If you charge a single price, what price should you charge? What is your total
profit? (5 MARKS)
b) Do you think there are customers who are currently not buying the product?
Do you think there are customers you could sell the good at a price that would
make both of you (seller and customer) better off? Explain you answer clearly.
(10 MARKS)
c) Suppose you want to charge your customers using perfect price
discrimination. Which customers do you sell to, how much do you charge?
What is the profit (if any)? (15 MARKS)
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