Problem 1. Suppose that a monopolist with MC = 0 faces two consumers with demand curves given by D₁ (P₁) = 42 - P1, D₂ (P2) = 21 - 1/2p2 a) Suppose the monopolist can tell the consumers apart. Find the optimal (profit-maximizing) pair of price-quantity packages. b) Please, find the optimal (profit-maximizing) pair of price-quantity pack- ages for the case when the monopolist can not tell the consumers apart.

ENGR.ECONOMIC ANALYSIS
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Problem 1. Suppose that a monopolist with MC = 0 faces two consumers
with demand curves given by
D₁(P₁) = 42 - P1, D2 (P2) = 21 – 1/2p2
a) Suppose the monopolist can tell the consumers apart. Find the optimal
(profit-maximizing) pair of price-quantity packages.
b) Please, find the optimal (profit-maximizing) pair of price-quantity pack-
ages for the case when the monopolist can not tell the consumers apart.
Transcribed Image Text:Problem 1. Suppose that a monopolist with MC = 0 faces two consumers with demand curves given by D₁(P₁) = 42 - P1, D2 (P2) = 21 – 1/2p2 a) Suppose the monopolist can tell the consumers apart. Find the optimal (profit-maximizing) pair of price-quantity packages. b) Please, find the optimal (profit-maximizing) pair of price-quantity pack- ages for the case when the monopolist can not tell the consumers apart.
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