low and high valuation groups Suppose a monopolist faces two groups of consumers willingness to pay...

  

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low and high valuation groups Suppose a monopolist faces two groups of consumers willingness to pay are described below. The monopolist can sell the durable product over two periods. Assume the discounting factor o = ninety cents in the first period). whose 0.9 (i.e., a dollar in the second period is only worth Low valuation consumer High valuation consumer Willingness to pay 25 30 3.1. If the monopolist sets the same price across two periods, what is the optimal price and profit? 3.2. Suppose the monopolist sets different prices across two periods in order to sell to the high valuation consumer in the first period and to the low valuation consumer in the second period. What are the optimal prices and profit? 3.3. Which strategy 3.1. or 3.2. - yields more profit for the monopolist? Why? low and high valuation groups Suppose a monopolist faces two groups of consumers willingness to pay are described below. The monopolist can sell the durable product over two periods. Assume the discounting factor o = ninety cents in the first period). whose 0.9 (i.e., a dollar in the second period is only worth Low valuation consumer High valuation consumer Willingness to pay 25 30 3.1. If the monopolist sets the same price across two periods, what is the optimal price and profit? 3.2. Suppose the monopolist sets different prices across two periods in order to sell to the high valuation consumer in the first period and to the low valuation consumer in the second period. What are the optimal prices and profit? 3.3. Which strategy 3.1. or 3.2. - yields more profit for the monopolist? Why?

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31 The profit maximizing level occurs in a monopoly where the Marginal Revenue MR MC equals the Marg... View the full answer