Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the demand functions facing the wireless telephone monopolist in Worked-Out Problem 18.4 (page 647) are Q1 = 80 - 50P for each low-demand consumer

image text in transcribed
Suppose the demand functions facing the wireless telephone monopolist in Worked-Out Problem 18.4 (page 647) are Q1 = 80 - 50P for each low-demand consumer and Q# = 200 - 50P for each high-demand consumer, where is the per-minute price in dollars. The marginal cost is $0.10 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 $0.10 and a fixed fee that causes both types of consumers to make a purchase? Profitlow = $ 70 0. Profithigh = $ 110 b. What if it charges a per-minute price of $0.20? Profitlow = $ Profithigh = $ c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.20 price more attractive than the $0.10 price? 7900 low-demand consumers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Microeconomics

Authors: N Gregory Mankiw

7th Edition

1305081676, 9781305081673

More Books

Students also viewed these Economics questions

Question

1. I try to create an image of the message

Answered: 1 week ago

Question

4. What is the goal of the others in the network?

Answered: 1 week ago