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Information for the following two questions: Consider a monopolist that can produce two versions of a good: basic (B) or fancy (F). They differ in
Information for the following two questions: Consider a monopolist that can produce two versions of a good: basic (B) or fancy (F). They differ in their constant marginal costs. There is no fixed cost. There are two types of consumers, professionals (P) or amateurs (A). They have different willingness-to-pay (WTP) for each version. The relevant information is described in the table below: Marginal WTPP WTPA Cost Fancy (F) 100 200 150 Basic (B) 50 100 75 The monopolist cannot set different prices based on the identity of the consumer. However, they can set different prices for the different versions of the goods. Assume that 10% of customers are professionals, and 90% are amateurs. Question 10: What is the highest price the monopolist can charge for the fancy version, assuming it wants to sell the basic version to amateurs and the fancy version to professionals? O 100 O 150 0 175 O 125 O 200
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