With the optimal block pricing schemes illustrated

Assignment Help Business Economics

Reference no: EM131083260

Suppose we have two types of consumers (for simplicity we’ll assume that there is one person of each type). They have inverse demand curves given by: p1 =110−2q1 and p2 =70−4q2. Initially, we will assume that the monopolist can tell them apart and that consumers cannot change or fake their type. Let the marginal cost of production be equal to 10. Label group 1 as the “high type” and group 2 as the “low type.”

(A) Next draw two graphs of the demand functions for the two consumer types, with the optimal block pricing schemes illustrated. Explain graphically what happens when the monopolist reduces q2.

(B) At what point will the monopolist want to stop decreasing q2?

Reference no: EM131083260

Questions Cloud

Give a schematic representation of a cell with a copper cell : Calculate the pBr of a bromide-containing solution that IS saturated With CuBr and contained in the cell described in (b) if the resulting potential IS -0.095 V.

A wide sense stationary random process : X(t), the input to a linear time-invariant filter is a wide sense stationary random process with expected value µX = -3 volts. The impulse response of the filter is

Higher interest rates-more capital invested : Using the four scenarios referred to in this chapter, choose periods when each scenario has occured in the U.S. or other countries: higher interest rates, more capital invested, lower interest rates, more capital invested.

Rights and obligations of the healthcare workforce : You will create a PowerPoint presentation discussing the rights and obligations of the healthcare workforce regarding access and disclosure of health information and summarizing the issues related to managing the release of information. You will c..

With the optimal block pricing schemes illustrated : Suppose we have two types of consumers (for simplicity we’ll assume that there is one person of each type). They have inverse demand curves given by: p1 =110−2q1 and p2 =70−4q2. Initially, we will assume that the monopolist can tell them apart and th..

Literature as part of a college literature course : Literature As part of a college literature course, students must select three classic works of literature from the provided list and complete critical book reviews for each selected work. Obtain a simple random sample of size 3 from this list. Wri..

Provide a comparative study of different methodologies : Describe what the project is all about. What are you going to do? Describe the existing system / Any problem or issues, which require this project to be undertaken.

Feedback on menu items to continuously feed that database : Pretend that you are opening up a new restaurant in your neighborhood. Describe how you would use digital technology including an outstanding customer database to maximize the relationships with your customers. What could you do in order to obtain pe..

User Account

All Pages