Reference no: EM133078686
There are two types of consumers: one half of consumers are type 1 (low type) and the other half are type 2 (high type). Type 1's demand curve is q1 = 4 - P, while type 2's demand is given by q2 = 6 - P. Consider a monopolist selling its product to these consumers. Assume that the marginal cost is equal to zero.
However, the firm does not know an individual consumer's type. It only knows that there are two types of consumers with demand curves given as above. Suppose that the firm can offer only a single two-part tariff, (T,P), where T is the lump-sum fee and P is the unit price.
(1) If the firm serves only high type consumers, what should be the optimal two-part tariff, T and P ? Also, compute the resulting profit.
(2) If the firm serves both types of consumers, what is the firm's profit when it offers (T,P)? Find the expression in terms of P only.
(3) Compute P that maximizes the firm's profit in (2). Also, compute the optimal T, as well as the resulting profit.
(4) Compare the profit from (1) and the profit from (3), and determine which two-part tariff will be chosen by the firm. Also, compute the social surplus from the two-part tariff chosen by the firm.
|
Find optimal price for the bundle
: A firm produces two kinds of products: Word and Excel. Both products are made by a monopolist. Four consumers are considering buying these products. The first c
|
|
What is the monopolistic outcome
: a) Assume the stadium capacity of 30,000. What is the monopolistic outcome (price and quantity)? Marginal revenue: MR = 200 - Q/200. Please demonstrate on the g
|
|
Ceremonies and agile principles discussion
: Describe the ceremony briefly and which agile principle you believe that it supports and your reasons for saying this
|
|
What degree is type of price discrimination
: -Your business partner is strongly opposed to your proposal to charge your largest customers lower prices for your web-based services than what you will charge
|
|
Compute p that maximizes the firm profit
: There are two types of consumers: one half of consumers are type 1 (low type) and the other half are type 2 (high type). Type 1's demand curve is q1 = 4 - P, wh
|
|
Health insurance in a sample of 20
: Assume binomial distribution. If 10% of the population do not have health insurance, how many individuals would you expect do not have health insurance in a sam
|
|
Why does netflix have backward vertical integration
: Why does Netflix have backward vertical integration for producing its own shows, but not forward vertical integration with internet service provision?
|
|
Explain challenges globalization
: Identify and explain THREE (3) challenges that Globalization, with illustrating examples, poses to Turks and Caicos Islands.
|
|
Determining the higher interest rate
: Consider Sally and Bob. They both live for two periods and have the same stream of income, Y1 in the first period and Y2 in the second period. However, given th
|