Microeconomics

1. [2D] A monopolist with cost function c[Q] :- ch {the numerical value of c will be given below) feces N +1 consumers. Consumer 1's demand funetion is Q; = 200 2?. The remaining N consumers have an identical demand function given by Q.- =75P, i =2,...,N+1. (a) [7] Let c = 1. Suppose the monopolist cannot engage in snapIr price dis- crimination. Find the price the monopolist will charge and its output level when N = 4. (b) [6] Maintain the assumption that c = 1. What happens to the price, the output level, and the Lerner index as N > cc? What is the consumer surplus, producer surplus, and the deadweight loss? Explain what is driving this result. {c} [7] Let r.- = I]. Suppose the monopolist knows that tlmre is one consumer with demand 01 = ll-2P and N = 2 consumers with demand function Q2 = 75 EP, but does not know which consumer is which. Find the monopolist's optimal setnnd degree price discrimination strategy