Bob is the only carpet installer in a small isolated town. The ...

[sammy]

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?
◦ $1 in the residential market and $5 in the business market
◦ $5.50 in the residential market and $8 in the business market
◦ $1 in each market
◦ $10 in the residential market and $15 in the business market

[katheyjon]

$5.50 in the residential market and $8 in the business market

[rmenurse]

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. Bob is likely to price discriminate because
◦ the installation of carpets cannot be resold.
◦ elasticities differ across markets.
◦ Bob can probably identify which consumers belong to which segment.
◦ All of the above.

[nikmaaacs]

All of the above.

[rmenurse]

TY

[nikmaaacs]

You're welcome