Question: A Monopolist is facing the market demand function Q. = 1,200- (1/4)p for Type A consumers and Qs = 900 - (1/3)p for Type B
A Monopolist is facing the market demand function Q. = 1,200- (1/4)p for Type A consumers and Qs = 900 - (1/3)p for Type B consumers, where Qe and Q, is total quantity demanded from Type A and Type B consumers respectively, when the monopolist charges a constant price of p dollars for every unit of output sold. The monopolist has the cost function (y) = 10y, which is the minimum level of costs for producing y units of output. a) Find the Pareto efficient output for Type A consumers. Denote this Qx: (1 mark) Find the Pareto efficient output for Type B consumers. Denote this QB. (1 mark) b) Find the maximum amount of money that Type A consumers are willing to pay for QA units. (1 mark) Find the maximum amount of money that Type A consumers are willing to pay for Qiz units. (1 mark) c) Find the maximum amount of money that Type B consumers are willing to pay for 1 QB units. (1 mark). Find the maximum amount of money that Type B consumers are willing to pay for QA units. (1 mark)
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