Consider the nonlinear price discrimination analysis in panel a of Figure 12.4.

a. Suppose that the monopoly can make consumers a take-it-or-leave-it offer. The monopoly sets a price, p*, and a minimum quantity, Q*, that a consumer must pay to be able to purchase any units at all. What price and minimum quantity should it set to achieve the same outcome as it would if it perfectly price discriminated?

b. Now suppose that the monopoly charges a price of $90 for the first 30 units and a price of $30 for subsequent units, but requires that a consumer buy at least 30 units to be allowed to buy any units.

Compare this outcome to the one in part a and to the perfectly price-discriminating outcome. M 5. Two-Part Pricing