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Consider a single buyer with inverse demand P(Y) = 200 2Y served by a single seller with total cost 00') = 1000 + Y2, where
Consider a single buyer with inverse demand P(Y) = 200 2Y served by a single seller with total cost 00') = 1000 + Y2, where Y is quantity. Assume that the seller has the power to make take-it-or-leaveit offers. (Adding more buyers would make this assumption more realistic but also make the problem more complicated.) (a) Compute the optimal (for the seller) takeit-or-leaveit offer, consisting of a quantity YTL and a unit price PTL (so that the consumer must pay PTLYTL or buy nothing). (10pts) (b) Compute the optimal (for the seller) two-part tariff, consisting of a \"right to purchase\" fee F and unit price PTPT, with the buyer allowed to buy as many or few units as she pleases at this unit price (provided she pays F). (5pts) (0) What is the deadweight loss under the rst scheme? Under the second? (513138)
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