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The monopoly firm, Buffs, is selling a good to two types of customers, high income (H) and low income (L). The individual demand functions for
The monopoly firm, Buffs, is selling a good to two types of customers, high income (H) and low income (L). The individual demand functions for each type of customer are given by QH = 11 - P and QI = 9 - P . Buffs has a unit cost of 1. Suppose Buffs practices first-degree price discrimination using two-part tariff. What are the optimal tariffs, ( )and )? Suppose Buffs practices third-degree price discrimination. What are the optimal prices, and for the two types of customers
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