A monopolist provides consumers in a village with cable TV and broadband, and consumers can subscribe...

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A monopolist provides consumers in a village with cable TV and broadband, and consumers can subscribe to either service. The total cost of providing cable TV and broadband is given by TC(y) = y² + 4 where y = y₁ + y2. When the demand of consumers subscribing to cable TV is y₁ = 8 - P₁ and that of consumers subscribing to broadband is y₂ = 12 - 2p2, find the Ramsey prices. A monopolist provides consumers in a village with cable TV and broadband, and consumers can subscribe to either service. The total cost of providing cable TV and broadband is given by TC(y) = y² + 4 where y = y₁ + y2. When the demand of consumers subscribing to cable TV is y₁ = 8 - P₁ and that of consumers subscribing to broadband is y₂ = 12 - 2p2, find the Ramsey prices.

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The Ramsey prices are P 2 and P 1 At the Ramsey equilibrium the monopolist will cho... View the full answer