A monopolist produces two versions of a software: basic or advanced. There are two types of consumers in the market. Type A consumers have a willingness to pay (WTP) of $30 for the basic version and $50 for the advanced version. Type B consumers have a WTP of $20 for the basic version and $35 for the advanced version. If the monopolist wants to implement second-degree discrimination, such that each consumer type chooses a different product, which prices would be the best option? (a) Pbasic (b) Pbasic = = = 15 and Padvanced 20 and Padvanced 10 and Padvanced 30 35 (c) Pbasic 35 (d) Pbasic 20 and Padvanced = 40 (e) None of the above options is correct.
A monopolist produces two versions of a software: basic or advanced. There are two types of consumers in the market. Type A consumers have a willingness to pay (WTP) of $30 for the basic version and $50 for the advanced version. Type B consumers have a WTP of $20 for the basic version and $35 for the advanced version. If the monopolist wants to implement second-degree discrimination, such that each consumer type chooses a different product, which prices would be the best option? (a) Pbasic (b) Pbasic = = = 15 and Padvanced 20 and Padvanced 10 and Padvanced 30 35 (c) Pbasic 35 (d) Pbasic 20 and Padvanced = 40 (e) None of the above options is correct.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A monopolist produces two versions of a software: basic or advanced. There are two types
of consumers in the market. Type A consumers have a willingness to pay (WTP) of $30
for the basic version and $50 for the advanced version. Type B consumers have a WTP
of $20 for the basic version and $35 for the advanced version. If the monopolist wants to
implement second-degree discrimination, such that each consumer type chooses a different
product, which prices would be the best option?
(a) Pbasic
(b) Pbasic
=
=
=
15 and Padvanced
20 and Padvanced
10 and Padvanced
30
35
(c) Pbasic
35
(d) Pbasic
20 and Padvanced
=
40
(e) None of the above options is correct.
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