A market comprises two consumers groups: high- demand types and low-demand types. Assume there are 100 consumers of each type. The high types have demand QH = 14 - Pand low types have demand QL = 12 – P. Assume the marginal (and average) cost is 4 and there are no fixed costs. If the monopolist firm is able to distinguish between the two consumer types and using block pricing to extract maximum profit, how much profit will they earn in total? |

A market comprises two consumers groups: high- demand types and low-demand types. Assume there are 100 consumers of each type. The high types have demand QH = 14 - Pand low types have demand QL = 12 – P. Assume the marginal (and average) cost is 4 and there are no fixed costs. If the monopolist firm is able to distinguish between the two consumer types and using block pricing to extract maximum profit, how much profit will they earn in total? |

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter9: Monopoly

Section: Chapter Questions

Problem 7SQP

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