Business
Business, 11.12.2019 21:31, kaitlynk0

The owner of burrito sisters hires you to apply your economic knowledge to increase their profits. each burrito costs $2 to produce and any setup costs are considered sunk. they have identified two segments of customers, students and non-students, who have the following demand functions: q.(p) = 20 - 2p, q2(p2) = 30 - p2 where q.(p) is the quantity demanded by students at price p. because they offer a uniquely delicious product, burrito sisters operates with market power in the market for burritos. a) in the graph area on the following page, graph the inverse demand function for non-students as a solid line and the inverse demand function for students as a dashed line. draw the marginal cost curve as a dotted line. be sure to label all intercepts. b) find the profit-maximizing price and quantity of burritos for each group of consumers. label these points in the graph area on the following page. c) suppose that burrito sisters could charge a one-time membership fee in addition to a price per burrito (they can still identify students). find the profit maximizing membership fee for each group of consumers, the profit maximizing price, and the quantity of burritos that will be consumed by each group.

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