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Consider a monopolist facing two consumers with the following two demand curves for its product: P1= 200 401 and P2 = 122- 6Q2. Assume
Consider a monopolist facing two consumers with the following two demand curves for its product: P1= 200 401 and P2 = 122- 6Q2. Assume FC = $20 and MC = $0. a) The monopolist decides to use a two-part tariff that permits both consumers to stay in the market. Solve for the monopolist's fixed fee and price scenario. What is their profit? b) Suppose they can only charge one price. What will their profits be?
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
