Suppose there are two types of consumers: Type 1 consumers have a lower demand for the good than type 2 consumers. Suppose a firm offers two packages to the consumers. Package 1 is a low-quality product at a low price, and Package 2 is a high quality package at a high price. The goal of the firm is to get the consumers to identify which type they are by choosing either Package 1 or Package 2. If the firm is successful, for each of the following statements, say whether it is True or False:

1.The Type 2 consumers are better off with the Type 1 consumers in the market than they would be without the Type 1 consumers.

2.The firm will be able to extract all of the consumer surplus from the Type 2 consumers.

3.The firm will be able to extract all of the consumer surplus from the Type 1 consumers.

4.The Type 1 consumers will receive a higher quality product when the Type 2 consumers are present than they would if the Type 2 consumers were not present.