What is optimal two-part tariff for this monopolist

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Reference no: EM131930275

1. Bond A has a time to maturity of 16 years and a duration of 12.98 years. Bond B has a time to maturity of 15 years and a duration of 13.12 years. Which bond has more interest rate risk and why?

A. Bond A because it has the longer time to maturity

B. Bond B because it has the shorter time to maturity

C. Bond A because it has the shorter duration

D. Bond B because it has the longer duration

2. The individual demand for a product has been estimated to be qd=32−2p, the firm’s cost function is C(q)=4q+25. What is the optimal two-part tariff for this monopolist?

A. A price per unit of $25 and a fixed fee of $144.

B. A price per unit of $4 and a fixed fee of $288.

C. A price per unit of $4 and fixed fee of $144.

D. A price per unit of $4 and fixed fee of $32.

E. None of the above.

Reference no: EM131930275

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