The marginal cost of producing ice cream cones is $1.00. Suppose the Ice Cream Monopoly Company sells to Juan using a two-part tariff with a per-cone price of $1.00. Instructions: Round your answers to 2 decimal places as needed. a. What is the largest fixed fee it can charge Juan and still persuade Juan to make a purchase? $ b. How does its total revenue from Juan under this two-part tariff compare to its total revenue from Juan when it sells Juan 6 ice cream cones, each priced at Juan's willingness to pay for it (on a cone-per-cone basis)? Under this two-part tariff, what is its total profit from Juan? TR = $ Profit = $

The marginal cost of producing ice cream cones is $1.00. Suppose the Ice Cream Monopoly Company sells to Juan using a two-part tariff with a per-cone price of $1.00. Instructions: Round your answers to 2 decimal places as needed. a. What is the largest fixed fee it can charge Juan and still persuade Juan to make a purchase? $ b. How does its total revenue from Juan under this two-part tariff compare to its total revenue from Juan when it sells Juan 6 ice cream cones, each priced at Juan's willingness to pay for it (on a cone-per-cone basis)? Under this two-part tariff, what is its total profit from Juan? TR = $ Profit = $

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 27CTQ: Can you think of an industry (or product) with near infinite elasticity of supply in the short term?...

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