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(10 points) You are the manager of a monopoly. A typical consumer's inverse demand function for your product isP =22040Q and your cost function is
(10 points) You are the manager of a monopoly. A typical consumer's inverse demand function for your product isP =22040Q and your cost function is C(Q) = 20Q.
a. (4 points) Determine the optimal two-part pricing strategy.
b. (6 points) How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per unit price?
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