+1-415-670-9189
info@expertsmind.com
Unable to distinguish between the two types of consumers
Course:- Microeconomics
Reference No.:- EM13700143




Assignment Help
Assignment Help >> Microeconomics

Suppose there are two types of consumers: Type A and Type B. The demands for a monopolist’s product for each type of consumers are given by:

Type A: Q = 80 – 2P

Type B: Q = 60 – 3P

Assume the marginal cost of production is constant and MC = 4, and there are no fixed costs.

a) Suppose the firm is unable to distinguish between the two types of consumers, and therefore cannot engage in price discrimination. Sketch the demand curve facing the firm. Make sure your graph is accurate and carefully labeled.

b) What price will the monopolist charge?

c) How much profit will the monopolist make?

d) If the monopolist is able to charge different prices to each type of consumer, what price will she charge to type A consumers?

e) If the monopolist is able to charge different prices to each type of consumer, what price will she charge to type B consumers?

f) How much profit will the monopolist make if it can price discriminate?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
One economist has argued that the East Asian exchange rate crisis of the late 1990s was due to "the simple failure of governments to remember the lessons from the breakdown
Explain what is different between firms in monopolistic competition and firms in oligopoly.  What does this difference mean for prices and quantities and for economic profit?
Should the club cover explicit and implicit costs? Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should w
Consider a city with a river. The city has a resort whose visitors use the river for recreational purposes. The city also has a tannery that creates industrial waste which i
Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4
Use multiple regression to estimate the demand function for widgets. Is this a good equation overall? (Why) Which variables are significant? (Why) Are widgets normal goods
you are required to pick a current economic topic that relates to the material we have covered or will cover in this course. You will research and find an article that cover
Milton Friedman felt that high inflation was always caused by excessive money growth. In fact, he has been quoted as "Inflation is always and everywhere a monetary phenomenon.