Question

i just need part d !

Question 2. Prior to the Supreme Court's May 2019 decision in Apple v. Pepper, Apple had monopoly power over what applications (Apps) could be downloaded on iPhones along with their pricing and fees. This problem investigates the effect of not allowing Apple to exercise its monopoly power over applications. Suppose there are two customers A and B who can buy an iPhone with or without ad- ditional Apps. Customer A is wealthy, but not having additional Apps is a deal-breaker and she might just buy the best competing brand instead. Customer B is what you might normally expect iPhone iPhone + Apps RP: $400 $1000 RP $300 $375 The production of iPhones has no fixed costs but has a marginal cost of $100. Whereas, Apps are developed for a fixed cost of $100 without any marginal costs. iPhones are sold for p, and customers can buy the additional Apps for PA. (a) What are the monopoly profit maximizing prices for iPhones (p) and Apps (PA)? (b) What is the monopoly profit maximizing price for iPhones (p.) if Apps must be sold at their average cost? What is the change in consumer surplus and profits?

its just that the consumer does not need apps, its not a deal breaker like consumer A

Answer 1

1 0 % change an income -50% as change in demand 2 150 X100 =tsom, Sucome Elasticity of demand = 5, chonge in quantity demanded / on change in income 300 sos.lson to the option The ausulet as it can not alin be according be assumed