Question
There are two types of consumers of a particular product: type A and type B.A consumer of type A has the inverse demand curve =10-q
There are two types of consumers of a particular product: type A and type B.A consumer of type A has the inverse demand curve =10-q and a consumer of type B has the inverse demand curve =10-q/3.Only one firm produces this product.It incurs no cost of production.This monopoly does not know the consumers' types.All it knows is that there are as many consumers of type A as of type B.The monopoly maximizes its profits by offering a menu of quantity/total-payment packages among which the consumers choose.What is the quantity that each type A consumer will end up consuming?
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