A Question 5 Consider a monopolist who faces 20 identical high-income consumers, each with an inverse demand Not yet PH=-Q+29 answered Marked out of and 52 identical low-income consumers, each with an inverse demand 100.00 PL=- Q+ 22 The monopolist has the following cost function C(Q)=4.Q Let WH(Q) denote the willingness to pay of a high-income consumer for Q units and let W (Q) denote the willingness to pay of a low-income consumer for Q units What is WH(Q) as function of Q= What is WL (Q) as a function of Q= OPTION 1: Suppose the monopolist offers only one type of package (Q, V) (buy Q units for a total price of V) which will be bought by high-income consumers. What is the profit function of the monopolist What is the quantity that the monopolist will choose in the bundle What is the price of the bundle What are the profits of the monopolist OPTION 2: Suppose the monopolist offers only one type of package (Q, V) (buy Q units for a total price of V) which will be bought by both low and high income consumers. What is the profit function of the monopolist What is the quantity that the monopolist will choose in the bundle What is the price of the bundle What are the profits of the monopolist OPTION 3: Suppose the monopolist offers two types of packages (QH. VH) (buy Q; units for a total price of VH) for high income consumers and package (QL, VL) (buy Q units for a total price of VL) for low income consumers MacBook Air esc 20 F3 888 FA FS 44 F7 IL FB DP FO SEA delete W U tab O A F H caps lock K Z X C V B N M alt alt control option command command optionWhat is the quantity that the monopolist will choose in the bundle What is the price of the bundle V What are the profits of the monopolist V OPTION 3: Suppose the monopolist offers two types of packages (QH, VM) (buy Q; units for a total price of VH) for high income consumers and package (QL, VL) (buy Q, units for price of VL ) for low income consumers What is the incentive compatibility constraint for the high-income people Call this /H What is the incentive compatibility constraint for the high-income people V What is the participation constraint for the high-income people V What is the participation constraint for the high-income people What is the objective function of the monopolist as a function of VH, VL, QH, QL Let the Incentive compatibility constraint for High income people be denoted by /}, and the one for low-icome people be denoted by /L . Also let the participation constraints for high-income consumers be denoted by Py and the one for low income-consumers be denoted by PL . We know that two of these constraints will hold with equality at optimal profits. Which are the two (HILL) (LIPH) ( HIPH) ( PHIPL) ( L.PL) MacBook Air esc 888 4 - F6 44 FT Il FB N CO dele tab W O P caps lock 4 S D G H K Z X C B N M alt 196 alt control option command command optionWhat is the objective function of the monopolist as a function of VH, VL, QH, QL V Let the Incentive compatibility constraint for High income people be denoted by /}, and the one for low-icome people be denoted by /2 . Also let the participation constraints for hig consumers be denoted by Py and the one for low income-consumers be denoted by PL . We know that two of these constraints will hold with equality at optimal profits. Which are ( P H PL) Given the binding constraints above, what would the profit function become as a function (QH, Q1) What is the quantity offered by the monopolist to high-income consumers and what is the bundle price dictated by the monopolist What is the quantity offered by the monopolist to low-income consumers and what is the bundle price dictated by the monopolist What are the profits of the monopolist from these bundles Which option yields the highest profits for the monopolist Option 1 Option 3 Option 2 MacBook Air esc 19 FI 295 F2 80 F3 888 FA F5 -2. F6 44 F7 II FB F10 W # $ W E R Y tab 4 D G caps lock H K X C V B M alt alt control option command command optionA What is the participation constraint for the high-income people v What is the participation constraint for the high-income people V What is the objective function of the monopolist as a function of VH, VL, QH, QL V Let the Incentive compatibility constraint for High income people be denoted by /}, and the one for low-icome people be denoted by /, . Also let the participation constraints for high-income consumers be denoted by P, and the one for low income-consumers be denoted by PL . We know that two of these constraints will hold with equality at optimal profits. Which are the two ( LIPH) (HI PM) ( P HI PL) ( / L , PL) ( HIPLY Given the binding constraints above, what would the profit function become as a function (QH, QL) What is the quantity offered by the monopolist to high-income consumers and what is the bundle price dictated by the monopolist V What is the quantity offered by the monopolist to low-income consumers and what is the bundle price dictated by the monopolist What are the profits of the monopolist from these V Which option yields the highest profits for the monopolist Option 1 Option 3 Option 2 MacBook Air esc 80 13 888 4 44 17 F10 45) . 2 delete W tab O caps lock 4 G K X V B N M alt alt control option command command option(H, PH) ( P H PL) (H , PL) Given the binding constraints above, what would the profit function become as a function (QH, QL) What is the quantity offered by the monopolist to high-income consumers and what is the bundle price dictated by the monopolist v What is the quantity offered by the monopolist to low-income consumers and what is the bundle price dictated by the monopolist V What are the profits of the monopolist from these bundles Which option yields the highest profits for the monopolist Option 1 Option 3 Option 2 Now suppose that the monopolist was mistaken in the number of low-end consumers and specifically the number of low end consumers was not estimated correctly. In order for the monopolist to still choose the same option as above, what should the proportion of low-income to high income consumers be greater than V Finally, if the proportion of low to high income consumers is smaller than above, which Option will maximizes the monopolist's profits Option 3 Option 1 Option 2 Previous page Finish attempt .. MacBook Air 19 F2 20 F3 888 FA F5 44 97 1I FB DP F9 45)) F12 % 5 8 delete WW tab R T U O P ups lock A S D C K Z X C V N M alt 96 alt control option command command option