A monopolist produces a good for which both the marginal cost and average total cost are

zero.

(i) The demand curve in a Market 1 is given by P = 50 - Q per month. Graph this market,

and calculate the monopolist's price and quantity.

(ii) Now suppose the monopolist described in (i) can also sell to a second market (Market

2) in which demand is given by P = 30 - Q per month. If the monopolist can price

discriminate (i.e., charge a different price in each market), how much will she charge in

this market?

(iii) Suppose now the monopolist cannot tell which market the consumer is from and

decides to offer bundles of 50 units and 30 units in Market 1 & 2 respectively. What

would be the number of units and price for each bundle?

(iv) What are the total monopolist profits in (ii), and (iii) respectively?