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A monopoly has two types of customers and is able to charge them the same two-part tariff. It knows that Type 1's demand is1=a1bp, and Type 2's is2=2 , where2>1. Assume that the monopoly has constant marginal costs m.

1. Suppose it is optimal to sell to both types, derive expressions for the optimal unit price p andderive expressions for the fixed fee T.
2. Suppose it is optimal to sell to only to Type 2, derive expressions for the optimal unit price p andderive expressions for the fixed fee T.