Suppose government regulations force the operator of the network to use a pricing scheme where the first n1 customers may join the network at a price of p1 each; the next n2 customers may join at an individual price of p2 > p1 and then 13 ? n1 ? n2 customers may join at an individual price of p3 > p2. The rules and the pricing scheme in 34.3(c) are one example of this kind of pricing scheme. What values of pi and ni would maximize revenue for the network provider?

*(Note: 34.3 question is the attached image)*

34.3 (1) A group of 13 consumers are considering whether to connect to a new computer network. Consumer 1 has an initial mine of $1 for hooking up to the network, consumer 2 has an initial value of $2, consumer 3 has an iinitial value of $3, and so on up to consumer 13. Each consumer's willingness to pay to connect to the network depends on the total number of persons who are connected to it. In fact, for each i, consumer i's willingness to pay to connect to the network is i times the total number of persons connected. Thus if 5 people are connected to the network, consumer 1's willingness to pay is $5, consumer 2's willingness to pay is $10 and so on. (a) What is the highest price at which 9 customers could hook up to the market and all of them either make a prot or break even? $45 (b) Suppose that the industry that supplies the computer network is com petitive and that the cost of hooking up each consumer to the network is $45. Suppose that consumers are very conservative and nobody will sign up for the network unless her buyer value will be at least as high as the price she paid as soon as she signs up. How many people will sign up if the price is $45? 0 (c) Suppose that the government o'ers to subsidize \"pioneer users\" of the system. The rst two users are allowed to connect for $10 each. After the rst two users are hooked up, the government allows the next two to connect for $25. After that, everyone who signs up will have to pay the full cost of $45. Assume that users remain so conservative that will sign up Only if their buyer values will be at least equal to the price they are charged when they connect. With the subsidy in place, how many consumers in toto will sign up for the network? 9