Question: (I) Consider a monopolist with demand D = 1002p, (1) and marginal cost MC = 40. Suppose the monopolist uses the perfect price discrimination. (1)

(I) Consider a monopolist with demand

D = 1002p, (1) and marginal cost MC = 40. Suppose the monopolist uses the perfect price discrimination.

(1) What is the optimal output?

(2) What is the maximal monopolist's profit under perfect price discrimination?

(II) SoS (Sounds of Silence, Inc) prepares to launch a revolutionary system of bluetooth-enabled noise-cancellation headphones. It is estimated that about 800,000 consumers would be willing to pay $500 for the headphones; an additional 1,000,000 consumers would be willing to pay $250 for the headphones. Though SoS knows this marketing information, it cannot identify a consumer as belonging to one group of the other.

SoS is considering the launch of a stripped-down version of the headphones (the stripped- down version uses wires instead of bluetooth). The 800,000 high-valuation consumers would only be willing to pay $325 for the stripped-down version. The remaining 1,000,000 consumers do not particularly care about bluetooth vs. wire connections; they are willing to pay the same $250 for either version. Both the bluetooth version and the stripped-down version cost the same to produce: $100 per unit.

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!

Chapter 1 Introduction to Accounting NAME ___________________________________________________ DATE _______________________________ 1. Which of the following events would be recorded as an accounting...

1A. Consider a monopolist with demand q = 120 - 2p and marginal cost MC = 40. Determine the firm's price and quantity under uniform pricing. Question 1 options: p = 50; q = 20 p= 45; q=40 p=40; q =...

1-) Suppose there are 1000 identical kumquat producers.For each, TC = 10 + q 2 .Market demand is Q = 600,000 - 100p. a) Derive the short-run equilibrium Q, q, and p. b) Does the typical firm earn a...

1-) Consider a monopolist with demand Q = 120-2 p and marginal cost MC = 40. Determine profit , consumer surplus , and social welfare in the following three cases: a) single-price monopolist; b)...

PART C: MARKETS: Do one of the following 2 questions. C1: PERFECT COMPETITION ..... museum:20 points. Suppose we have many firms each with an individual supply curve of q' = $ P). Assume that firms...

a.Explain three phases of a long-run average total cost curve. b. What long-run effect will an increase in market demand have on a decreasing-cost industry? c. In a monopoly market, suppose the...

Exercise 1 Suppose a profit-maximizing monopolist producing Q units of output faces the demand curve P = 20 - Q. Its total cost when producing Q units of output is TC' = 24 + Q2. The fixed cost is...

Suppose a monopolist has the following cost function C(Q) = 50Q (with marginal cost MC = 50). Suppose it faces market demand of P = 200 - Q. (2 points) (a) Sketch the market demand, marginal...

Suppose a monopolist has the following cost function C(Q) = 50Q (with marginal cost MC = 50). Suppose it faces market demand of P = 200 - Q. (a) Sketch the market demand, marginal revenues, and...

For Questions 2 3 and 2 4 , consider a monopolist facing demand and with costs as illustrated below. 2 3 . First suppose the monopolist must charge all customers the same price ( the marginal revenue...

Please answer all the questions with blanks, boxes, and graphs with coordinates please. Please answer all questions according to the question number. Please don't summarize the answers in paragraphs....

A liquid has a density p. (a) Show that the fractional change in density for a change in temperature T is p/ = -BT. What does the negative sign signify? (b) Fresh water has a maximum density of 1.000...

A student strolls diagonally across a level rectangular campus plaza, covering the 50-m distance in 1.0 min (Fig. 3.25). (a) If the diagonal route makes a angle with the long side of the plaza, what...

Find f ( t ) . 1 ( s / s ^ 2 + 1 0 s + 2 6 )

Please complete the federal income tax return for Maggie Schmitz for the tax year 2020. Please complete Form 1040 in its entirety (down to the amount owed or the amount to be refunded) and Schedule...

(i) 1000 kg of crushed oil seeds (19.5% oil, 80.5% meal) is extracted with 1500 kg of pure hexane in a batch extraction vessel. Calculate the fraction of oil extracted. (ii) Crushed oil seed...

Ryson Incorporated sells a lantern popular with campers for $20 per unit. Variable expenses are 25% of sales, and fixed expenses total $427,500 annually. Required: Answer the following in the space...

Compute the CLV metric and then apply it in a simple breakeven analysis. The data below show the results of a Starbucks segmentation study. Each column shows the values for a typical customer in each...

How does the Microsoft Teams Technology you are using help the learning for a management of organization class?

12. The form of creative action strategy, where would you say you have a strength, as a dreamer, as a realist or as a critic?

16. Now put the areas you have ranked in order of priority and reflect on which values they correspond to in your value hierarchy.

14. Now reconcile what you answered to problem 15 with problem 13.