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The individual demand for a slice of pizza is given by QD = 6 – P. Assume the marginal cost of a slice of pizza is constant at $1.00 and the marginal revenue (MR) function is 6 – 2Q. a. What is the profit-maximizing price and quantity if the seller sells all slices at a single price? b. Suppose that the seller decides to sell pizza at cost and charge a fixed price for this option. What quantity will a customer demand at the market price? What is the maximum fixed price the seller can charge for this option? Discuss the value of this seller’s pricing strategy.

The individual demand for a slice of pizza is given by QD = 6 - P. Assume the marginal cost of a slice of pizza is constant at $1.00 and the marginal revenue (MR) function is 6 - 2Q.

a. What is the profit-maximizing price and quantity if the seller sells all slices at a single price?

b. Suppose that the seller decides to sell pizza at cost and charge a fixed price for this option. What quantity will a customer demand at the market price? What is the maximum fixed price the seller can charge for this option?

Discuss the value of this seller's pricing strategy.

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