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An avocado farmer can produce normal or organic avocados at a perunit cost of 1 for normal avocados and 3 for organic avocados. There are

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An avocado farmer can produce normal or organic avocados at a perunit cost of 1 for normal avocados and 3 for organic avocados. There are two types of avocado consumers in the market, light consumers of avocado [a share 0 {1 p at l of the population) and heavy consumers of avocado [1 p of the population}. Light consumers are willing to pay up to $4 for a normal avocado, and up to $5 for an organic avocado. Heavy consumers are willing to pay up to $5 for a normal avocado, and $11 for an organic avocado. Assume the avocado farmer can price discriminate and maximises expected per customer prots. Regarding consumers, assume that consumer payoffs equal willingness to pay minus price paid, that a consumer buys at most one avocado, and that a consumer who does not buy any avocado gets a payoff of D. If a consumer is indifferent between buying a normal or an organic avocado, assume she will buy the organic one. If a consumer is indifferent between buying an avocado and not buying, assume she will buy. Wherever rounding is needed, please round to 3 decimal points. a} {1 poi nt} If the avocado farmer chooses the optimal separating menu, what price would she set for a normal avocado? E b} [1 point] If the avocado farmer chooses the optimal separating menu, what price would she set for an organic avocado? H c} [3 points} If the proportion of light avocado consumers is less than , the avocado farmer would choose an exclusion menu rather than a separating menu (fill in the blank}. E

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