Question

D Question 17 1 pts Consider a monopolist that has two types of consumers. The first, students have a demand curve given by the following: QA-120-2P. The second type of consumer are non-students who have the following demand curve: QB-200-4P. If the monopolist has constant marginal and average cost equal to 10, which of the following is true if the monopolist practices third degree price discrimination? Total profit earned equals 2150. Total profit earned equals 2250 Total profnt earned equals 2650. Total profit earned equals 2850. O None of the above Question 18 1 pts Assume that individuals are homogeneous and that each has a demand curve of the following form for internet service: P-50-2Q where P is the price per hour and Q is hours per month. Assume the firm has a constant marginal cost of $10. The proft maximising two-part tariff results in the firm selling hours and receiving total from each consumer: 19:247 19: 280: 20:600 21:450 None of the above.

Answer 1

Answer (17): The correct answer is None of the above

                                      This is because, it is given that the demand for the students is given by Qa=120-2P and that for the non-students is given by Qb=200-4P

             Now, if we deduce any one of these equations,

Qb=200-4P

Qb=200-4(60- (Qa/2))

Qb=200-240-2Qa

Qb+Qa= 40

             Therefore, Q= 120-2P

                       =120-40= 40

Now, if the quantity is 40, hence Price will be 40 x 40 = 1600.

Answer (18): The correct answer is 20 : 600

                           This is because, it is given that P=50-2Q

                                                        Therefore, if the marginal cost is 10, then the equation will deduce as:

                                                  2Q=50-P

                                                       = 50-10

                                                  Q= 40/2

                                                     =20

                         & the Revenue will be = 50-P/2

                                                                  = 50 x 12

                                                                  = 600