Question: Consider a monopolist who faces 19 identical high-income consumers, each with an inverse demand and 259.3 identical low-income consumers, each with an inverse demand

Consider a monopolist who faces 19 identical high-income consumers, each with an

inverse demand and 259.3 identical low-income consumers, each with an inverse demand

The monopolist has the following cost function Let WH(Q) denote the willingness

Consider a monopolist who faces 19 identical high-income consumers, each with an inverse demand and 259.3 identical low-income consumers, each with an inverse demand The monopolist has the following cost function Let WH(Q) denote the willingness to pay of a high-income consumer for What is WH(Q) as function of What is WL(Q) as a function of units and let WL(Q) denote the willingness to pay of a low-income consumer for units OPTION 1: Suppose the monopolist offers only one type of package (Q, V)(buy Q units for a total price of V) which will be bought by high-income consumers. What is the profit function of the monopolist What is the quantity that the monopolist will choose in the bundle What is the price of the bundle What are the profits of the monopolist OPTION 2: Suppose the monopolist offers only one type of package (Q, V)(buy Q units for a total price of V) which will be bought by both low and high income consumers. What is the profit function of the monopolist What is the quantity that the monopolist will choose in the bundle What is the price of the bundle What are the profits of the monopolist OPTION 3: Suppose the monopolist offers two types of packages (QH, QH units for a total price of VH) for high income consumers and package (QL, QL units for a total price of V L) for low income consumers What is the incentive compatibility constraint for the high-income people Call this IH What is the incentive compatibility constraint for the high-income people What is the participation constraint for the high-income people What is the participation constraint for the high-income people What is the objective function of the monopolist as a function of V

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