Shell Designs, Inc. faces the following monthly demand for its designer coffee mugs, which are hand-made using a special clay from imported from Costa Rica:
The average cost of producing each hand-made coffee mug is $8, and costs are constant.
-Not only does Shell Designs lose profit in the amount of the consumer surplus computed in part b, but it also could make $____________ of additional profit on the extra coffee mugs it could sell if each buyer could be forced to pay their individual maximum price (i.e., "mugged" into paying their demand price) instead of the uniform price under perfect price discrimination.

Question

Shell Designs, Inc. faces the following monthly demand for its designer coffee mugs, which are hand-made using a special clay from imported from Costa Rica:
  The average cost of producing each hand-made coffee mug is $8, and costs are constant.
-Not only does Shell Designs lose profit in the amount of the consumer surplus computed in part b, but it also could make $____________ of additional profit on the extra coffee mugs it could sell if each buyer could be forced to pay their individual maximum price (i.e., "mugged" into paying their demand price) instead of the uniform price under perfect price discrimination.

Quizplus · Accepted Answer

The Answer of Shell Designs, Inc. faces the following monthly demand for its designer coffee mugs, which are hand-made using a special clay from imported from Costa Rica:
  The average cost of producing each hand-made coffee mug is $8, and costs are constant.
-Not only does Shell Designs lose profit in the amount of the consumer surplus computed in part b, but it also could make $____________ of additional profit on the extra coffee mugs it could sell if each buyer could be forced to pay their individual maximum price (i.e., "mugged" into paying their demand price) instead of the uniform price under perfect price discrimination.