Question
A group of potential phone users are indexed by x [0,1]. We denote the total number of consumers who actually subscribe to the phone system
A group of potential phone users are indexed by x [0,1]. We denote the total number of consumers who actually subscribe to the phone system by n, 0 1 and the price of subscription by p. We define the utility of a consumer indexed by x, 0 1, as: = (1 ) , if he or she subscribes to the phone system and U = 0, if he or she does not subscribe. Suppose the phone company is a monopoly and cost of adding a customer is zero. Show the monopolist subscription price such that the number of subscribers exceed half of the customer population but is less than the entire population
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