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Homework answers / question archive / A VR Game Centre (CCVR Centre) considers adopting a ‘pay-per-game’ charging model to exploit all potential gain from the customers

A VR Game Centre (CCVR Centre) considers adopting a ‘pay-per-game’ charging model to exploit all potential gain from the customers

Economics

A VR Game Centre (CCVR Centre) considers adopting a ‘pay-per-game’ charging model to exploit all potential gain from the customers. Assuming that there is no fixed cost and marginal cost of operation per game and the following table shows the demand schedule of a ‘typical’ customers on its games.

Price($) 90 80 70 60 50 40 30 20 10 0 Games 1 2 3 4 5 6 7 8 9 10

As a new appointed manager of CCVR Centre, your boss asks you to provide a recommendation on the ‘pay-per-game’ charging model. In your recommendation, besides providing a conclusion on whether your company can capture all potential gain, you are also required to provide the figures of the marginal benefit, marginal revenue, total benefit and total revenue on each quantity a typical customer under the pay-per-ride charging model, the profit-maximizing price and quantity and profit your company could earn per typical customer.

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