3.There is a single manufacturer with a marginal cost of 3 and a single distributor with a marginal cost of 1. Both manufacturer and distributor are monopolies. The distributor faces a demand curve of d (p)=12-p. The demand curve of the manufacturer is the marginal revenue curve of the distributor.

Suppose the manufacturer can offer a two-part tariff to the distributor. What is the optimal two-part tariff? At what price will the distributor sell? What quantity will be sold? What is the consumer surplus of each firm?