Question

An intermediary offers clients a financial service, and the intermediary faces a fixed cost of $24,000. The intermediary currently has 82,000 clients and faces a variable cost of $5.50 per client. In this case, what is the most competitive price offer the intermediary can charge each client?

Group of answer choices

$5.8

$6.4

$11.5

$33.5

Firm A & B compete for market share, where x_i is firm i's client base, for i = A & B. Firm A has a cost of $2.5 per client and a fixed cost of $750, while B has a cost of $4.5 per client and a fixed cost of $450. If firm A can offer a competitive price of $6.00 and B can offer $7.40, then it must be that A has _____ clients and B has ______ clients.

Group of answer choices

234; 155

234; 163

214; 155

214; 163

Answer 1

Answer Summary :-

1. Option A) $5.8 is correct

2. Option C) 214; 155 is correct