Question
Suppose the demand functions facing the wireless telephone monopolist in Worked-Out Problem 18.4 (page 647) are QdL=50100P=50100 for each low-demand consumer and QdH=120100P=120100 for each
Suppose the demand functions facing the wireless telephone monopolist in Worked-Out Problem 18.4 (page 647) are QdL=50100P=50100 for each low-demand consumer and QdH=120100P=120100 for each high-demand consumer, where P is the per-minute price in dollars. The marginal cost is $0.20 per minute. Suppose the monopolist offers only a single two-part tariff. Instructions: Round your answers to 2 decimal places as needed. a. What will be the monopolist's profit from each type of consumer if it charges a per-minute price of $0.20 and a fixed fee that causes both types of consumers to make a purchase? Profitlow = $ . Profithigh= $ . b. What if it charges a per-minute price of $0.30? Profitlow = $ . Profithigh= $ . c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.30 price more attractive than the $0.20 price? low-demand consumers.
Is not $2, $9 or 90 or 30
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