What will be the monopolist''s profit from each type of

What will be the monopolist''s profit from each type of consu

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Reference no: EM13772035

Suppose the demand functions facing the wireless telephone monopolist are QdL=80-50P for each low-demand consumer and QdH=2000-50P for each high-demand consumer, wherePis the per-minute price in dollars. The marginal cost is $0.10 per minute. Suppose the monopolist offers only a single two-part tariff.

a. What will be the monopolist's profit from each type of consumer if it charges a per-minute price of $0.10 and a fixed fee that causes both types of consumers to make a purchase?

Profit_low= $.

Profit_high= $.

b. What if it charges a per-minute price of $0.20?

Profit_low= $.

Profit_high= $.

c. If there are 200 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.20 price more attractive than the $0.10 price?

Reference no: EM13772035

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