Car sharing company deciding how to price services. There are Occasional drivers (O) and work drivers (W)
0 Demand =Qo=10-.25P, W Demand=Qw=12-.25P
Q is number of miles driven per month, and P is in $ per mile
there are 200 O and 200 W drivers
MC=$1 per mile and FC=18,000 per month
Calculate single pricing to maximize profit (both groups)
Calcualte a two part tariff with a single monthly fee and a per mile price, attract only W drivers, what is per mile fee and monthly membership fee?
graph individual demand curves for O and W driver as well as a price line of $1 per mile