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2. First-degree price discrimination Consider the following economy. There are two consumers, 1 and 2, who derive utility from a certain good (2:) and from

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2. First-degree price discrimination Consider the following economy. There are two consumers, 1 and 2, who derive utility from a certain good (2:) and from money (m). The consumers' utility functions are 114(33, m) = 40%;? + m, U2($, m) 2 GOV; + m. A monopolist produces the good at constant average and marginal costs c = 5. Suppose that the monopolist observes the consumers' utility and makes takeitorleaveit offers (73,331)), i = 1, 2 (9",; denotes the payment that consumer i has to make to receive :81- units of the good). Compute the optimal offers (i.e. that offers that maximize the monopolist's prots)

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