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Please help me solve this 4. The market for a monopolist's good consists of two types of consumers: the rst has a demand given by
Please help me solve this
4. The market for a monopolist's good consists of two types of consumers: the rst has a demand given by PA : 180 5Q A and the second has demand given by P3 : 130 6623. To begin with there is one of each type of consumer. The monopolist's cost function is C(Q) 2 10} which means the monopolist has a marginal cost of 10 a. If the monopolist can rst degree price discriminate, what is the optimal two part tariff to charge each type of consumer? What are the optimal block pricing bundles to sell to each type of consumer? (10 pts) b. Suppose that the monopolist cannot tell the two groups apart and can only use second degree price dis crimination. What is the optimal menu of bundle(s) to offer to the consumers? (10 pts) c. Now suppose that the monopolist is still restricted to second degree price discrimination, but instead of having one of each type of consumer, there is one of type B and X of type A. What does X have to be before it's better for the monopolist only to sell to A types. (Note: X is not necessarily an integer) (5 pts)Step by Step Solution
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