Need some quick help with micro econ homework
So I'm feeling brain dead this week and have been struggling with this HW question for my intermediate micro class.
Consider a monopolist facing two demand curves for its product (from two different types of consumers):
P1 = 10 - Q1 P2 = 14 - Q2 where Q1 and Q2 are the quantities purchased. For simplicity sake, assume MC=AC=4.
a. The monopolist decides to price using a single two part tariff. Assume that the monopolist sets price equal to MC.
i. If there are 100 total customers, ½ of which are type 1 customers and ½ of which are type 2 customers, what fee would maximize the firms profits? Would it sell the good to both types of customers?
ii. Assuming that there are 100 total customers, what is the minimum number of type 1
customers that must exist so that the firm would find it profitable to sell to both types of
customers?
b. Now suppose the firm is deciding to offer a menu of two part tariffs. It will offer the following pricing choices:
Plan 1: P = 6 and Fee = 8, with a maximum quantity that can be bought = 4
Plan 2: P = 4 and Fee =??
If there are 100 total customers, 70 of which are type 1 customers and 30 of which are type 2 customers, what fee would the firm set in Plan 2 to maximize its profits?
Help would be appreciated






No
No
"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.
LOL
LOL
You got to be kidding me...
You got to be kidding me...
Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus
Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!
you are a fucking tool
you are a fucking tool
you probably would've
you probably would've finished that faster than the time you spent typing it
I copied and pasted it...
I copied and pasted it...
"There are only two opinions in this world: Mine and the wrong one." -Jeremy Clarkson
I knew I'd take crap for
I knew I'd take crap for asking about this, but its been a horrible week and nothing is clicking for me.
"There are only two opinions in this world: Mine and the wrong one." -Jeremy Clarkson
.
.
a) i. $3.50 ii. $ 9,001 b)
a)
i. $3.50
ii. $ 9,001
b) idk
lol
lol
This makes me so happy to be
This makes me so happy to be a recent grad.
If this monopolist has set
If this monopolist has set AC=MC=price then he is a pretty shitty monopolist. Must be the government trying to minimize dead weight loss.
Tell him you don't believe in monopoly production functions because you are a finance student, and in finance...there are no such thing as market failures and dead weight loss is a mythical construct.