2. A monopolist with zero cost, that is c(q)= 0, faces two consumers whose demand functions are given below. Q: = 6-P Q2 = 12-2P (a) Suppose the monopolist cannot engage in any price discrimination. Find the firm's optimal pricing strategy. Calculate the firm's Lerner index. (b) Now, assume that price discrimination is possible. Find the monopolist's optimal first degree price-discrimination strategy. (e) Find the monopolist's optimal second degree price-discrimination strategy. (d) Find the monopolist's optimal third degree price-discrimination strategy.

2. A monopolist with zero cost, that is c(q)= 0, faces two consumers whose demand functions are given below. Q: = 6-P Q2 = 12-2P (a) Suppose the monopolist cannot engage in any price discrimination. Find the firm's optimal pricing strategy. Calculate the firm's Lerner index. (b) Now, assume that price discrimination is possible. Find the monopolist's optimal first degree price-discrimination strategy. (e) Find the monopolist's optimal second degree price-discrimination strategy. (d) Find the monopolist's optimal third degree price-discrimination strategy.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

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2. A monopolist with zero cost, that is c(q) = 0, faces two consumers whose demand
functions are given below.
Q1 = 6-P
Q2 = 12-2P
(a) Suppose the monopolist cannot engage in any price discrimination. Find
the firm's optimal pricing strategy. Caleulate the firm's Lerner index.
(b) Now, assume that price discrimination is possible. Find the monopolist's
optimal first degree price-discrimination strategy.
(c) Find the monopolist's optimal second degree price-discrimination strategy.
(d) Find the monopolist's optimal third degree price-discrimination strategy.

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