01 Question (2 points) e See page 484 Second-degree price discrimination is about charging different prices depending on the quantity consumers buy. Selling a number of units as a package at a single price for the package is referred to as block pricing, and is part of a second-degree price-discriminating strategy. Generally, a second-degree price discriminating monopolist sells different packages at different prices. For simplicity, this problem focuses on the pricing (and associated surplus/welfare) of a particular block (targeting one particular set of customers), which follows a very similar logic to that of a two-part tariff. A company has a monopoly in the sale of fancy toothpicks. The company has estimated the inverse demand from a customer in its target audience to be p 1.60 0.04q. Assume all consumers in the target audience have identical individual inverse demand functions. The company's marginal cost for a fancy toothpick is constant at $0.24. There are no fixed costs. For the questions below, if necessary, round your answers to the nearest two decimals. 1st attempt Part 1 (0.8 point) See Hint , and the company earns Suppose the company simply sells fancy toothpicks at a single per-unit price. If the company is maximizing the amount of profits it can earn by selling toothpicks individually, each customer must be obtaining consumer surplus of $ profits-per-customer of $ Part 2 (0.8 point) Now suppose instead that the company will sell fancy toothpicks only in boxes. If the company uses optimal block pricing, each customer must be obtaining consumer surplus of $ , and the company is earning profits-per-customer of $ Part 3 (0.4 point) Socially, it would be optimal for the company to sell toothpicks See Hint See Hint