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Suppose there are two types of consumers: Type A and Type B. The demands for a monopolist's product for each type of consumers are given by:
Type A : Q=100-4P
Type B: Q=60-P
Assume that marginal cost of production is constant and MC=4. There are NO fixed costs.
a) If the monopolist is able to charge different prices to each type of consumer, what price will she charge Type A consumer?
b) What price will she charge Type B consumer?
c) How much profit will the monopolist make?
For parts d-e, suppose the monopolist cannot price discriminate between the two groups and so is forced to charge a single price for both type of consumers,
d) What price will the monopolist charge?
e) How much profit will the monopolist make?
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