Price Question

Q4. A market consists of two population segments, A and B. - An individual in segment A has demand for your product: Clo = 1 p. - An individual in segment B has demand for your precinct: Clh = 2 2*p. Each segment has 1000 people in it. Marginal cost is zero. - Fixed cost is zero. a} [5 points) Assume that you can only charge the same price to both segments, and you cannot charge any xed fee {i.e., you cannot use two-part tari]. What is the prot- maximizing price? What is the corresponding total quantity demanded'? What are the corresponding prots? [You need to rst show the total market demand for your product. Then use it to help you derive the answers] b) (6 points) Assume that you can tell which segment each individual belongs to, and you can use a two-part tariff. Design two different two-part tariffs to maximize your profits1 one for segment A, and one for segment B. What are the fixed fees and per unit prices for these two two-part tariffs? What are the corresponding prots from each segment? c} (-5 points) Assume that you cannot tell which segment each individual belongs to, and you can use two-part tariff. Design two different two-part tariffs to maximize your profits, one for segment A, and one for segment B. Assume that the per unit price for segment A is {1.5. What is the xed fee for segment A? What are the per unit price and xed fee for segment B? What are the corresponding profits from each segment