Question
(Second-degree price discrimination) There are only two consumers: consumer 1 with demand curve D1 and consumer 2 with demand curve D2. The monopolist cannot engage
(Second-degree price discrimination) There are only two consumers: consumer 1 with demand curve D1 and consumer 2 with demand curve D2. The monopolist cannot engage in first-degree price discrimination because he does not which consumer is consumer 1. The monopolist bears no cost of production, that is, c (Q)=0, for all Q. For the different cases below, find the monopolist's optimal non-linear pricing schedule, that is his best couple of quantity-total payment packages. How would the quantities change if the monopolist could engage in first-degree price discrimination.
1. D1 : p1 = 10 q and D2 : p2 = 12 (0.8)q.
2. D1 : p1 = 10 q and D2 : p2 = 30 (1.5)q.
3. D1 : p1 = 10 q and D2 : p2 = 10 q.
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