8. A monopolist with cost function c(q) = q faces two consumers whose demand functions are given below. Q₁ = 100-P 50-P (a) Suppose the monopolist is a uniform pricing firm (i.e.the monopolist can- not engage in any price discrimination). Find the firm's optimal pricing strategy. Calculate the firm's Lerner index. (b) What is the deadweight loss associated with this pricing strategy, if any? (c) Now, assume that price discrimination is possible. Find the monopolist's optimal second degree price-discrimination strategy. (d) Find the monopolist's optimal third degree price-discrimination strategy.
8. A monopolist with cost function c(q) = q faces two consumers whose demand functions are given below. Q₁ = 100-P 50-P (a) Suppose the monopolist is a uniform pricing firm (i.e.the monopolist can- not engage in any price discrimination). Find the firm's optimal pricing strategy. Calculate the firm's Lerner index. (b) What is the deadweight loss associated with this pricing strategy, if any? (c) Now, assume that price discrimination is possible. Find the monopolist's optimal second degree price-discrimination strategy. (d) Find the monopolist's optimal third degree price-discrimination strategy.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 20SQ
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![8. A monopolist with cost function c(q) = q faces two consumers whose demand
functions are given below.
Q₁ = 100-P
50-P
Q₂
(a) Suppose the monopolist is a uniform pricing firm (i.e.the monopolist can-
not engage in any price discrimination). Find the firm's optimal pricing
strategy. Calculate the firm's Lerner index.
(b) What is the deadweight loss associated with this pricing strategy, if any?
(c) Now, assume that price discrimination is possible. Find the monopolist's
optimal second degree price-discrimination strategy.
(d) Find the monopolist's optimal third degree price-discrimination strategy.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51d12f6d-abdf-4e03-978c-fd2db4ae1611%2Fb61be9d8-536b-4246-b8e9-59596e80332b%2F5rdfwv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:8. A monopolist with cost function c(q) = q faces two consumers whose demand
functions are given below.
Q₁ = 100-P
50-P
Q₂
(a) Suppose the monopolist is a uniform pricing firm (i.e.the monopolist can-
not engage in any price discrimination). Find the firm's optimal pricing
strategy. Calculate the firm's Lerner index.
(b) What is the deadweight loss associated with this pricing strategy, if any?
(c) Now, assume that price discrimination is possible. 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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