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Two-part tariff (25 points) Consider the following simple two-part tariff problem. There are two consumers. The first consumer's demand curve is and the second consumer's
Two-part tariff (25 points) Consider the following simple two-part tariff problem. There are two consumers. The first consumer's demand curve is and the second consumer's demand curve is . The marginal cost is .
a). (10 points) If the firm wants to charge the fixed fee that is equal to one consumer's surplus, how should he sets the two-part tariff T and P, where P is the price?
b). (15 points) Now firm want to set an optimal two-part tariff. Write out the firm's profit function and solve optimal T and P.
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