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decides to offer a menu of capacity-price bundles (qL, tL ) and (qH, tH) to incentives the two types of consumers to sort themselves out.
decides to offer a menu of capacity-price bundles (qL, tL ) and (qH, tH) to incentives the two types of consumers to sort themselves out. Answer part g) to i) in this context. g) (1 point) For H-type consumer, what is the optimal (profit maximising) level of qH? h) (1 point) Suppose (qt, tx ) is the optimal (profit maximising) capacity-price bundle for L-type consumer under asymmetric information. What is the value of t* ? i) (0.5 points) What is the seller's overall profit under asymmetric information if the seller offers a menu of profit maximizing capacity-price bundles (qL, tL ) and (qH, tH) to consumers?d) (0.5 point) Suppose that the seller continues to offer the capacity-price bundles that maximises his profit under complete information: that is, he offers (q L, t L) and (9 H, tH). What is the utility for the type OF consumer from buying the (9 H, t H) bundle? That is, what is UL(q H, t H)? e) (1 points) What is the utility for the type OH consumer from buying the (9 z, t L) bundle? That is, what is UH (q L, tL)? f) (1 point) What are the seller's profits if he offers the bundles (q L, t L) and (q H, t H) when information is asymmetric?Answer the following. If rounding is needed, round to 3 decimal points. a) (0.25 point) Suppose (9 [, t L) is the optimal (profit maximising) capacity-price bundle for L-type consumer under complete information. What is the value of t I ? b) (0.25 point) Suppose (9 H, t H) is the optimal (profit maximising) capacity-price bundle for H-type consumer under complete information. What is the value of t H ? c) (0.5 points) What is the seller's overall profit under complete information? For part d) - i), assume information is asymmetric
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