Question
4. A manufacturer of ash drives has a prot function = t q 2 , wheret is the price charged for a ash drive and
4. A manufacturer of ash drives has a prot function = t q 2 , wheret is the price charged for a ash drive and q 2 is the cost of producing a drive whose capacity is q gigabytes. A consumer of type has a utility function u = q t, where takes on a value of 8 for H-type consumers, or 6 for L-type consumers. There are 100 consumers of each type. A consumer gets zero utility if she does not buy. (a) Calculate the optimal bundles qL,tL and qH,tH under full information. (b) Calculate the optimal separating contract (q L , t L ) and (q H, t H) under asymmetric informatio
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