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A ski area offers access in the form of packages that charge a single fee for a number of lift tickets. there are two types
A ski area offers access in the form of packages that charge a single fee for a number of lift tickets. there are two types of consumers that the monopolist that runs the ski area cannot distinguish from one another, low and high demand consumers. they have the following inverse demand for lift runs:
For low-demand consumers: PL = 12 - QL
For high-demand consumers: PH = 16 - QH
The firm's marginal cost, MC, of a list ride is equal to $4.
- suppose all consumers are low-demand consumers. what would the profit maximizing package look like? what is the profit per consumer?
- suppose all consumers are high-demand consumers. what would the profit maximizing package look like? what is the profit per consumer?
- suppose instead that there are the same number of the two types of consumers and that the monopolist wants to sell both consumer types by offering two packages, one for each type of consumer. what would the profit-maximizing menu of packages look like? what is the profit for each pair of consumers, one low-demand and one high-demand?
- is the outcome efficient?
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