Analysis of LogCo's Pricing Strategy in the Grain Transportation Industry

What does the demand curve for LogCo look like?

What does the demand curve for LogCo look like? Please draw it.

Assuming LogCo does not price discriminate (i.e. charges the same price per ton to all customers), what price should LogCo charge per ton to maximize profits.

If the Northern inner waterways Miritituba-Barcarena would respond to any loss of profitable volumes due to LogCo pricing, would that affect your price/ton?

Imagine that customers A, B and C were to be acquired by one company (say Cargill) so that A, B and C are now just different farming and harvesting locations from which that customer originates grains.

 Question 4:

How would that change your price/ton, if at all? (note: in reality there are other companies so the company uses structured pricing and does not engage in take-it-or-leave it negotiations. You can only decide on a price per ton).

Imagine you could now use a volume discount mechanism (Eg. A price of R$P for the first x tons, a discount of R$D1/t and hence a price of R$(P-D1) for a volume exceeding x tons and yet another deeper discount of R$D2/t and hence a price of R$(P-D2) for a volume exceeding y tons next, what would that discount structure be (i.e. what is (x, D1) and (y, D2)?

Imagine now that Cargill wants to transport 400 Ktons from location A (as before), 200 Ktons (instead of 100 Ktons) from location B and 300 (instead of 200) Ktons from location C, how does that affect your answers to questions 1, 2 and 3?

They can either load the grains onto a number of trucks at the farm, transport them to RTE and unload them onto a number of LogCo’s cars which will transport them by rail to the seaport of Santos where they will be unloaded and then uploaded onto a sea vessel. The price per ton to bring the grains to RTE is R$70/t for customer A and R$40/t for customer B (who is located closer to the train terminal).

They can transport the grains by truck from their location all the way to the port of Santos. That costs R$280/t for customer A who is located further from the port of Santos and R$200/t for customer B who is closer to the port of Santos than customer A.

Customer C is located up North in Brazil. This customer has 2 viable options too:

As with customers A and B, the customer can either load the grains onto a number of trucks at its farm who will transport them to RTE and upload them onto a number of train cars which will bring the grains by rail to the port of Santos. The price per ton to bring them to RTE is R$75/t. 

As the customer is located more North, it can also take the truck-waterways combination: First transport the grains by truck to the city of Miritituba and load them on a boat that will transport them by waterways to the seaport of Barcarena and from there via a sea vessel to its customers world-wide. You can assume that the cost of transporting grains from both the seaports of Santos or Barcarena to its customers world-wide is the same.