or 0 units of output from the monopolist. There are two types of consumers in the market. The table summarizes each consumer’s gross surplus derived from the different varieties produced by the monopolist.
See Table Suppose the monopolist cannot distinguish between consumers.

(a) If the monopolist charges p1 = 100 and p2

= 200 for version 1 and 2, respectively, which good does each consumer buy? How much does the monopolist earn in profits?

(b) Do these prices maximize profits? If not, state the profit-maximizing prices.

(c) How would your answer change if Consumer A’s gross surplus derived from Version 2 was 170 instead of 140?