Suppose the demand functions facing the wireless telephone monopolist in Worked-Out Problem 18.4 (page 647) areQ = 50-50Pfor each low-demand consumer andQ = 140 - 50Pfor each high-demand consumer, where P is the per-minute price in dollars. The marginal cost is $0.10 per minute. Suppose themonopolist offers only a single two-part tariff.Instructions: Round your answers to 2 decimal places as needed.a. What will be the monopolist's profit from each type of consumer if it charges a per-minute price of $0.10 and a fixed fee that causesboth types of consumers to make a purchase?Profitlow = $Profit high = $b. What if it charges a per-minute price of $0.20?Profitlow = $Profit high= $c. If there are 200 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.20 pricemore attractive than the $0.10 price?low-demand consumers.

For each low- and high-demand consumer, the demand functions are QDL =50 - 50P and QDH = 140 - 50P,…

Answered: Q = 50-50P each low-demand consumer and…

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Economics

Q = 50-50P each low-demand consumer and Q=140-50P

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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