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Please help to solve this MCQ. Detailed explanations for each option (why it's correct or wrong) are required. Thanks! 8. An economy has two kinds

Please help to solve this MCQ.

Detailed explanations for each option (why it's correct or wrong) are required.

Thanks!

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8. An economy has two kinds of consumers. Type A consumers have utility function U A(x1,x2) = 4x1 x5 + x2 and Type B consumers have utility function 2 U3(x1,x2) = 2x1 %+x2. The price of good 2 is 1 and all consumers have incomes of 100. There are 100 type A consumers and 100 type B consumers. Suppose that a monopolist can produce good 1 at a constant cost of c per unit and he cannot engage in price discrimination. For which of the following values of c will the monopolist choose to sell both types of consumers? a) 1.2 b) 0.8 c) 2.5 d) The monopolist will never choose to sell to both consumers

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