Question: Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by p = 100 -3q. The monopoly's cost function is

Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by p = 100 -3q. The monopoly's cost function is C(q) = 2q2. (a) Suppose the monopolist cannot discriminate prices and must set a uniform price. Compute price and quantity set by the monopolist. Compute the profit of the monopoly. (b) Suppose now that the monopoly can set a two-part tariff. Find the optimal two-part tariff. Compute the profit of the monopolist

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Lets solve the problem step by step a Uniform Price 1 Determine the Revenue Function The inverse demand function is given by p 100 3q Therefore the to... View full answer

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