Optimal declining price schedule

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A Monopolist faces inverse demand curve P = 270 - Q and produces output at constant marginal cost MC = 30.

1. Suppose that the demand curve above represents the demand of a typical consumer and that the monopolist employs a declining price schedule. Describe the schedule. What is the price of the qth unit sold? How many units will the monopolist sell to this consumer.

2. What is the deadweight loss under the optimal declining price schedule?

3. Suppose that the demand curve above represents the demand of a typical consumer and that the monopolist employs a two-part tariff consisting of a fixed fee F and a price per unit consumed p. What values of F and p maximize the monopolist's profit?

Reference no: EM133063403

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