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Now consider a different market in which there are just two consumers who both live for two periods. Consumer H has a valuation of the
Now consider a different market in which there are just two consumers who both live for two periods. Consumer H has a valuation of the use of the refrigerator in each period of VH (their maximum willingness to pay for services in one period). The other consumer, consumer L, has a period-period valuation of VL for the service of thefridge. Furthermore, assume that VH > 2VL > 0. Again, the monopolist produces the refrigerator that lasts for two periods(c) What are the prices and quantities sold in each of the two periods by a monopolist who rents the services of good? What are its profits? (d) If the monopolist sells the good in each of the periods (again where a purchaser at t = 1 does not buy the product again at t = 2), what are the quantities and prices in each period and what are the monopolist's profits? Compare your answers in parts c and d - what is the intuition for your result
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