Suppose Bang Bang is the only local swimming pool. She believes that there are 10 potential customers. Each of them has an identical demand function of Q I = 250 – 0.02P, with QI as the unit of...


Suppose Bang Bang is the only local swimming pool. She believes that there are 10 potential customers. Each of them has an
identical demand function
 of QI = 250 – 0.02P, with QI as the unit of services of each customer. She operates with a constant variable cost of $500 per unit of service.


In reality, demand from different customers may not be identical. Discuss how this might create problems to Bang Bang in conducting a two-part tariff.



Jun 08, 2022
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