A rock-climbing school faces two demand curves. The demand by local residents is

Question

A rock-climbing school faces two demand curves. The demand by local residents is Q = 400 – 0.5P, and the demand by nonlocal residents is Q = 500 – 0.5P. The marginal cost of serving either local or nonlocal residents is constant at $100. If the rock-climbing school cannot practice third-degree price discrimination and must charge a single price to all customers, it will charge a price of: a. $400. b. $800. c. $375. d. $500. A rock-climbing school faces two demand curves. The demand by local residents is Q = 400 – 0.5P, and the demand by nonlocal residents is Q = 500 – 0.5P. The marginal cost of serving either local or nonlocal residents is constant at $100. If the rock-climbing school cannot practice third-degree price discrimination and must charge a single price to all customers, it will charge a price of: a. $400. b. $800. c. $375. d. $500.

Explanation / Answer

c 375

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