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It is an extremely hot and sunny day on Far Rockaway beach. However, there is only one sh0p selling sunscreen; the shop is a monopolist

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It is an extremely hot and sunny day on Far Rockaway beach. However, there is only one sh0p selling sunscreen; the shop is a monopolist retailer of sunscreen. There are two types of people on the beach: the ones who enjoy sunbathing and the ones who have a delicate skin and need to be very careful when they relax under the sun. This suggests that they have a different willingness to pay for sunscreen, since the rst group feels more condent tanning without protection (even though they know they should always use some sunscreen). The rst group has demand q1 = 150 - p1 and the second one has demand (12 = 200 192. The supplier has marginal cost M C (q) = 497, where q = q1 + q; is the total amount sold at the beach. (a) (1)) Suppose that the owner of the shop is able to distinguish whether each customer has delicate skin or not. Hence, she can separate the customers into the two groups discussed above (third degree price discriminatiOn). She prepares two (only apparently) different sunscreens and sells them at different prices. In this way, each group will pay its own price per unit. How many units does the shop sell to each group? At what prices? Suppose that the owner of the shop knows every person in Far Rockaway very well. She can rst degree price discriminate her customers by charging each his / her full willingness to pay for every unit. How many units does she sell to each group? Finally, assume that the owner of the shop is new in town and so she is not able to distinguish among the two groups; she can only set a single price for everyone. Compute the total market demand the supplier is facing (quantity as function of the price; remember, here the two different groups have different price intercepts). Then, compute the marginal revenue as function of the total quantity and the optimal quantity and price set by the m0n0polist. Are customers from both groups buying the goods? Please provide a graphical representation of the analysis

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