1. Amonopolist with zero cost, that is c(q)=0, faces two consumers whose demand functions are given below. Q1 = 10-P Q2 = 4-P (a) Suppose the monopolist cannot engage in any price discrimination. Find the firm's optimal pricing strategy. (b) Now, assume that price discrimination is possible. Find the monopolist's optimal first degree price-discrimination strategy. (c) Find the monopolist's optimal second degree price-discrimination strategy.

1. Amonopolist with zero cost, that is c(q)=0, faces two consumers whose demand functions are given below. Q1 = 10-P Q2 = 4-P (a) Suppose the monopolist cannot engage in any price discrimination. Find the firm's optimal pricing strategy. (b) Now, assume that price discrimination is possible. Find the monopolist's optimal first degree price-discrimination strategy. (c) Find the monopolist's optimal second degree price-discrimination strategy.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.2P

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