You currently sell the same product to both professional plumbers and homeowners, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows: If your marginal cost is $10 and you are interested in maximizing your revenues, how would you adjust your prices?
A) Increase plumbers' price and decrease homeowners' price.
B) Decrease plumbers' price and increase homeowners' price.
C) Increase prices for both groups.
D) Decrease prices for both groups.

Question

You currently sell the same product to both professional plumbers and homeowners, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows:  If your marginal cost is $10 and you are interested in maximizing your revenues, how would you adjust your prices?
A) Increase plumbers' price and decrease homeowners' price. 
B) Decrease plumbers' price and increase homeowners' price. 
C) Increase prices for both groups. 
D) Decrease prices for both groups.

Quizplus · Accepted Answer

The Answer of You currently sell the same product to both professional plumbers and homeowners, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows:  If your marginal cost is $10 and you are interested in maximizing your revenues, how would you adjust your prices?
A) Increase plumbers' price and decrease homeowners' price. 
B) Decrease plumbers' price and increase homeowners' price. 
C) Increase prices for both groups. 
D) Decrease prices for both groups.

You Currently Sell the Same Product to Both Professional Plumbers