4. Third-Degree Price Discrimination. A monopolist has two sets of customers: low demand and high demand. Suppose that the demand functions for both types of consumers are given by the following equations: QL-1600-2PL and Qi-4800 - P.The monopolist faces constant marginal cost of $200. Suppose that the monopolist can separate the two groups and charge separate, profit maximizing prices to each. Suppose that cannot discriminate between the two groups (Hint: be careful in your analysis and think of reservation prices) 1. What price will the monopolist set? 2. What is consumer surplus in this case?
4. Third-Degree Price Discrimination. A monopolist has two sets of customers: low demand and high demand. Suppose that the demand functions for both types of consumers are given by the following equations: QL-1600-2PL and Qi-4800 - P.The monopolist faces constant marginal cost of $200. Suppose that the monopolist can separate the two groups and charge separate, profit maximizing prices to each. Suppose that cannot discriminate between the two groups (Hint: be careful in your analysis and think of reservation prices) 1. What price will the monopolist set? 2. What is consumer surplus in this case?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![4. Third-Degree Price Discrimination.
A monopolist has two sets of customers: low demand and high demand. Suppose that the
demand functions for both types of consumers are given by the following equations:
QL-1600-2PL and Qu-4800 - P.The monopolist faces constant marginal cost of
$200. Suppose that the monopolist can separate the two groups and charge separate,
profit maximizing prices to each.
Suppose that cannot discriminate between the two groups (Hint: be careful in
your analysis and think of reservation prices)
1. What price will the monopolist set?
2.
What is consumer surplus in this case?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c5571bc-9db6-4bfb-87f8-e94740fe33db%2Fb2c4f2b2-6c60-45fa-9ec0-8e7fe9717d44%2Fn067gmn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Third-Degree Price Discrimination.
A monopolist has two sets of customers: low demand and high demand. Suppose that the
demand functions for both types of consumers are given by the following equations:
QL-1600-2PL and Qu-4800 - P.The monopolist faces constant marginal cost of
$200. Suppose that the monopolist can separate the two groups and charge separate,
profit maximizing prices to each.
Suppose that cannot discriminate between the two groups (Hint: be careful in
your analysis and think of reservation prices)
1. What price will the monopolist set?
2.
What is consumer surplus in this case?
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