Question
You are a monopoly producer of widgets. Your marketplace consists of two types of buyers. A Big buyer has a demand curve given by the
You are a monopoly producer of widgets. Your marketplace consists of two types of buyers. A "Big" buyer has a demand curve given by the equation: QB = 200 - P A "Little" buyer has a demand curve given by the equation: QL = 100 - P There is an equal number of each type of buyer. Your marginal cost is 20. Questions 1. (a) Calculate the monopoly price if there is no price discrimination. (b) Calculate monopoly profits. 2. Using some type of second-degree price discrimination approach, devise a new pricing structure in which the following are true: (1) You make more profit than you would without price discrimination. (2) No consumer is worse off than they would be without price discrimination. (3) At least one consumer is better off than they would be without price discrimination. Please show all significant calculations
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