Question: 5 Suppose in a given market there are two types of consumers depending on the value of the pa rameter l9. l9 takes two possible

 5 Suppose in a given market there are two types of

5 Suppose in a given market there are two types of consumers depending on the value of the pa rameter l9. l9 takes two possible values {3216.1} where 5'2 '2 61. The consumeri's utility function is given by: Um; T} = {lg-VG) T, where q is the quanity consumed and T is the total amount of money payed to consumer q. The function VLq} is: V09}: aw 0siq={} Assume marginal costs of production are zero. There are 100 consumers and the proportion of consumers with low demand type is 60%- Take :9:- E {0.5; 1}- (a) Compute the demand functions of the two types of consumers if they pay a uniform price i-E- T0?) = pq (b) Compute the tariffs) quantities and prot if the monopolist can perfectly discriminate between C0SUIEI'S- (c) Compute the aggregate demand function for the two markets. Compute the uniform price if the Government forces the monopolist to charge a uniform price i_e_ T[q) =p

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!