.

6. [16] Some guy named Bom Trady has a monopoly over nice (some might even say "super") bowls. The market demand for his bowls is Q(P) = 120 -5P and it costs him C(Q) = Q2 to produce them. a. [5] Derive the first order condition of the Bom's profit maximization problem under uniform pricing. b. [4] Show algebraically that the marginal revenue curve lies below the demand curve. C. [4] Calculate his profit and the consumer surplus. d. [3] Is it possible that Bom is a natural monopolist? Explain you reasoning. 7. [16] Remember that guy, Bom? .. now he has decided to implement a two-part tariff. (Assume all consumers are identical.) a. [6] Calculate the profit maximizing prices that he would set for the unit and lump-sum costs. b. [6] Calculate Bom's profit, how does it compare to the profit he would earn with uniform pricing (question 6c)? c. [4] Explain whether Bom be better-off using a first degree price discrimination scheme instead of a two-part tariff. What would his profit be if he decided to do this