Jimmy has a room that overlooks, from some distance, a major league baseball stadium. He decides to rent a telescope for $50 a week and charge his friends and classmates to use it to peep at the game for 30 seconds. He can act as a monopolist for renting out "peeps". For each person who takes a 30 second peep, it costs Jimmy $.20 to clean the eyepiece. Jimmy believes he has the following demand for his service:

Price of a Peep Quantity of Peeps Demanded TR MR

$1.20 0

1.00 100

.90 150

.80 200

.70 250

.60 300

.50 350

.40. 400

.30 450

.20 500

.10 550

a) For each price, calculate the total revenue from selling peeps and marginal revenue per peep.

b) At what quantity will Jimmy's profit be maximized? What price will he charge? What will his total profit be?

c) Jimmy's landlady complains about all the visitors coming into the building and tells Jimmy to stop selling peeps. Jimmy discovers, though, if he gives the lady $.20 for every peep he sells, she will stop complaining. What effect does this bribe have on the marginal cost per peep? What is the new profit maximizing equilibrium quantity of peeps? What effect does the bribe have on Jimmy's profits (all these answers should be numbers)?