Car sharing company deciding how to price services

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

Here’s the SOLUTION

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