Explain durable goods pricing

Reference no: EM13177800

Durable goods pricing. Consider the example discussed in class. The monopoly sells two units of goods over two periods. The costs are zero. Consumer A has a valuation of 15 and Consumer B has a valuation of 10. Suppose the discount rate is ?=.8. If we allow Consumer B to have a valuation of k<15, at what value of k the monopoly is indifferent between selling both units in the first period and selling only one in each period?

Reference no: EM13177800

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