You currently sell the same product to both students and faculty members, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows: Price Number sold Slope of demand curve Students $5 200 0.01
Faculty $10 30 0.40
If your marginal cost is $1 and you are interested in maximizing your revenues, how would you adjust your prices?
A)Increase prices for both groups.
B)Decrease prices for both groups.
C)Increase student price and decrease faculty price.
D)Decrease student price and increase faculty price.

Question

You currently sell the same product to both students and faculty members, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows: Price Number sold Slope of demand curve Students $5 200 0.01
 Faculty $10 30 0.40
If your marginal cost is $1 and you are interested in maximizing your revenues, how would you adjust your prices?
A)Increase prices for both groups. 
B)Decrease prices for both groups. 
C)Increase student price and decrease faculty price. 
D)Decrease student price and increase faculty price.

Quizplus · Accepted Answer

The Answer of You currently sell the same product to both students and faculty members, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows: Price Number sold Slope of demand curve Students $5 200 0.01
 Faculty $10 30 0.40
If your marginal cost is $1 and you are interested in maximizing your revenues, how would you adjust your prices?
A)Increase prices for both groups. 
B)Decrease prices for both groups. 
C)Increase student price and decrease faculty price. 
D)Decrease student price and increase faculty price.

You Currently Sell the Same Product to Both Students and Faculty