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Please show all work for part a and b Suppose that there are two consumers. The rst consumer has a demand function Q1 2 10

Please show all work for part a and b

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Suppose that there are two consumers. The rst consumer has a demand function Q1 2 10 10 and the second consumer has a demand function 2 q2=10p Suppose that the monopolist has a constant marginal cost (3 and cannot distinguish the consumers. The monopolist would like to design the optimal twopart tariff scheme (1:), E), where p is the per unit price and E is the \"entry fee\". The monopolist needs to consider two alternatives. In alternative 1, the monopolist excludes consumer 1: (p, E) is such that consumer 1 nds it too exensive to pay the entry fee. This case is similar to the example we covered in class. In alternative 2, the monopolist sets (p, E) such that both consumers participate. (a) Assume c : 3. What is the optimal two part tariff the monopolist can offer? How much does each consumer purchase? What is the monopolist's prot? (b) Now assume that c = 8. What is the optimal two part tariff the monopolist can offer? How much does each consumer purchase? What is the monopolist's prot

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