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You are a monopolist with many identical customers. Each customer will buy either zero, one or two units. Customers have a marginal value of
You are a monopolist with many identical customers. Each customer will buy either zero, one or two units. Customers have a marginal value of $50 for the first unit and $20 for the second. The cost to produce output has a constant marginal cost of $5 per unit. If you could not engage in second-degree price discrimination what price would you charge? How much profit would you earn? If you could bundle the units into packs of two what price could you charge and how much profit would you make?
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Absolutely lets analyze the scenario of a monopolist with identical customers Without SecondDegree Price Discrimination Since you cannot engage in seconddegree price discrimination which involves char...Get Instant Access to Expert-Tailored Solutions
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