Question
A) A monopoly is considering selling several units of a homogeneous product as a single package.A typical consumer's demand for the product is: Q =
A) A monopoly is considering selling several units of a homogeneous product as a single package.A typical consumer's demand for the product is: Q = 24 - 3P.If the marginal cost of production is $6, what is the optimal number of units to put into the package?
B) If the marginal cost of production is $6 and the monopolist puts the optimal number of units into the package, what should the monopolist charge for this package?
C) If the marginal cost of production is $6 and the monopolist puts the optimal number of units into the package and charges the optimal price for the package, what is the value of the consumer surplus (CS) assuming the consumer buys the package?
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