Question: fExercise 15 : Non-linear pricing 1.00 0.50 MC = 0 100 300 Seller offer : A menu of two-part tariffs given by Contract L: PL

\fExercise 15 : Non-linear pricing 1.00 0.50 MC = 0 100 300 Seller offer : A menu of two-part tariffs given by Contract L: PL = FL = Contract H: PH = FH = Buyer choice Buyer Net consumer surplus Buyer ype Contract L Contract H Choice LD buyer HD buyer Seller profit: It = NLD( ) + NHD( Block pricing. If the firm sold blocks of output for a fixed fee and no user fee then what would the block sizes be and what would the prices be? Let WTPHD = $2 instead of $0.50. Re-do the exercise

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