1. A monopolist faces a market split evenly between high valuation consumers with individual inverse demand PH = 20 yH and low valuation consumers with individual inverse demand PL = 15 3yL For convenience, suppose the rm has a marginal cost equal to zero. Moreover, arbitrage is not possible. (a) (15 points) Assume the rm cannot observe group status (i.e., cannot identify if a customer has a high or low valuation). Determine the rm's best seconddegree pricing scheme. Show this outcome on a graph and explain why your answer is the best strategy for the rm. (b) (5 points) Is the market outcome in part (a) Pareto efcient? If not, calculate the dead weight loss. (0) (15 points) How will your answer in part (a) change if the low valuation customers have an inverse demand given by PL = 4 2yL'? Fully explain your