Determine the firms best second degree pricing scheme

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A monopoly faces a market evenly split between high valuation consumers, with demand p= 10- y and low valuation consumers with demand p= 8- 2y. Marginal Cost = 0
arbitrage is impossible and the firm is free to to use two parts tarrif pricing for these groups.
Determine the firm's best second degree pricing scheme, explain why it is the best outcome for the firm.

Reference no: EM13237064

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