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Suppose the demand functions facing the wireless telephone monopolist In Worked-Out Problem 18.4 (page 647) are QË = 40 – 50P for each low-demand consumer and Q4 = 200 – 50P for each high-demand consumer, where P Is the per-minute price In dollars. The marginal cost Is $0.10 per minute. Suppose the monopolist offers only a single two-part tariff. Instructlons: 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 causes both types of consumers to make a purchase? Profitiow= $ | Profitnigh b. What If It charges a per-minute price of $0.30? Profitjow" Profitnigh c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.30 price more attractive than the $0.10 price? |low-demand consumers.

Suppose the demand functions facing the wireless telephone monopolist In Worked-Out Problem 18.4 (page 647) are QË = 40 – 50P for each low-demand consumer and Q4 = 200 – 50P for each high-demand consumer, where P Is the per-minute price In dollars. The marginal cost Is $0.10 per minute. Suppose the monopolist offers only a single two-part tariff. Instructlons: 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 causes both types of consumers to make a purchase? Profitiow= $ | Profitnigh b. What If It charges a per-minute price of $0.30? Profitjow" Profitnigh c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.30 price more attractive than the $0.10 price? |low-demand consumers.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the demand functions facing the wireless telephone monopollist in Worked-Out Problem 18.4 (page 647) are Qi = 40 – 50P for each low-demand consumer and Q = 200 – 50P for each high-demand consumer, where Pis the per-minute price in dollars. The marginal cost Is $0.10 per minute. Suppose the monopolist 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 causes both types of consumers to make a purchase? Profitiow- Profitnigh b. What if It charges a per-minute price of $0.30? Profitiow= Profitnigh = $ c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.30 price more attractive than the $0.10 price? low-demand consumers.
Transcribed Image Text:Suppose the demand functions facing the wireless telephone monopollist in Worked-Out Problem 18.4 (page 647) are Qi = 40 – 50P for each low-demand consumer and Q = 200 – 50P for each high-demand consumer, where Pis the per-minute price in dollars. The marginal cost Is $0.10 per minute. Suppose the monopolist 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 causes both types of consumers to make a purchase? Profitiow- Profitnigh b. What if It charges a per-minute price of $0.30? Profitiow= Profitnigh = $ c. If there are 500 high-demand consumers, how many low-demand consumers can there be for the monopolist to find the $0.30 price more attractive than the $0.10 price? low-demand consumers.
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