Answered: 1. Find the condition of k that only…

1. Find the condition of k that only consumer A can purchase. 2. Find the condition of k that both consumers A and B can purchase.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 1.7CE

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Question

(Industrial organization theory, two-part tariff)

1. Find the condition of k that only consumer A can purchase.

2. Find the condition of k that both consumers A and B can purchase.

Demand function
Cоnsumer A : GA
= 4- p
1
Consumer В: Ҫв— 2—
Marginal cost : mc= c
Two-part tariff : T=k+pq

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