Consider asecond-degree price discriminating monopolist faces an inverse demand curve given by 187 - 2Q and a cost function given by C(Q) = 10Q

Suppose the monopolist uses two blocks in adeclining-block pricing scheme. It charges a highprice, P1, on the first Q1 units(the firstblock) and a lowerprice, P2, on the next Q2Q1 units.

Calculate theprofit-maximizing values for Q1, Q2

a. Quantity sold in the first block:

b. Total quantity sold:

Calculate the change in social surplus and consumer surplus when the monopolist went from the uniform pricing model to a nonlinear pricing model with two blocks

c. Change in social surplus:

d. Change in consumer surplus: