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A monopolist knows that there are two types of consumers, high demand (H) and low demand (L) types. Inverse demand for each consumer of the
A monopolist knows that there are two types of consumers, "high demand" (H) and low demand (L) types. Inverse demand for each consumer of the two types is P = 150 qL' and P = 200 qH. 60% of consumers are of the L type. Marginal cost is zero.
a) find the optimal price
b) Suppose the firm sets a fee, plus a price per unit. Show on a diagram.
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