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(a) Suppose first that the seller uses a single instrument and that she is confident that she can tell group A consumers apart from group
(a) Suppose first that the seller uses a single instrument and that she is confident that she can tell group A consumers apart from group B consumers. Find the profit-maximizing price and sales in this case. What is her profit? (b) Let here now instead apply a two-part tariff, still assuming she can distinguish consumer types. Find the optimal tariff, sales, and profits. (c) Finally assume that she cannot distinguish between the consumers, she only knows the distribution of A and B consumers. What is her optimal tariff in this case? What are the associated profits? (d) Comment on the differences between the three scenarios described above.A monopolist is operating a business that caters to two different consumer groups, A and B. The demand functions are given by: VA = 100 - PA = 220 - 2PB The seller estimates that there are nA = 1, 000 consumers in group A, and ng = 500 Consumers in group B. The cost function is: C (y) = 50, 000 + 20y
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