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1. Suppose there are two potential customers in the market. One has demand function D1(p)=10-p ....

1. Suppose there are two potential customers in the market. One has demand function D1(p)=10-p . The other has demand function D2(p)=20-2p. The only firm in this market has constant marginal cost of 2. (2nd-degree price discrimination) Given the market as described in the above question, suppose the monopolist cannot identify the two consumers, but he can use a single two-part tariff.

(a)Find out the optimal fixed fee and per-unit price.

(b)Is it more profitable to serve both consumers or to serve only the one with higher demand?

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Answer #1

1 tRe manket Io -P E2 ( P)-20-2P d Add function ora 2.ldere prte discoiminacthion ce discofmira-ion 2 20-29 HR 10-2q, HR2 10-12 斗 2.2) 2- This clasticty f demand s same h t rrakets at e, hence prcesae at equel equion

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