Problem 3 (4 points) Assume that you work as a pricing specialist for a monopolist that faces two types of consumers: low- demand consumers and high-demand consumers. You cannot identify which group an individual customer belongs to, so you have to develop a smart pricing strategy. You choose a block pricing strategy that consists of two packages. Package Low, targeted to low-demand consumers, and package High, targeted to high- demand consumers. a) One characteristic of the optimal solution is that the low demand group will be offered less than the socially efficient quantity. Describe in words other characteristics of the optimal solution. = 20-2QL b) Now, assume a constant marginal cost of 4 and that the inverse demand functions are P and PH = 30-QH. Also assume that your boss, the owner of the firm who is not an economist, has decided that 3 units should be sold to each low-demand consumer. Given your boss's choice of QL, how much should you charge from each low-demand consumer and from each high-demand consumer, and how much should you sell to each high-demand consumer to make as large profit as possible? Explain how you derived your answers. c) Assume now that there is one consumer of each type and prove for your boss that it would be better to set QL 2 (compared to Q = 3). =