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Consider a monopolist who is faced with the market demand curve P = 10 - Q. Its total cost is given by 2Q.
If the monopolist has to use one price, what would be profit maximizing price?
If the monopolist can use two part tariff, what would be the entrance (to the market) fee and the price for each unit of the good?
What is the difference between (a) and (b) from the perspectives of consumers, monopolists, and the society as a whole.
BMW has MC=$20,000 and FC=$10billion. Demand for markets in Europe and US are Qe=4,000,000-100Pe and Qu=1,000,000-20Pu. Prices and Costs are given in thousands.
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