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A monopolist with cost function C(q) = ÷q² faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit.

A monopolist with cost function C(q) = ÷q² faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit.

Survey Of Economics
Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 15SQ
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A monopolist with cost function C(q) = ;q? faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit. b) There is resale at zero cost and bundling in packages of arbitrary size. c) Resale is possible at a cost of "t" per unit. d) The good is a personal and non-transferable service. e) Repeat the above analysis, but this time assuming that costs are C(q) = q with q < 8.
Transcribed Image Text:A monopolist with cost function C(q) = ;q? faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit. b) There is resale at zero cost and bundling in packages of arbitrary size. c) Resale is possible at a cost of "t" per unit. d) The good is a personal and non-transferable service. e) Repeat the above analysis, but this time assuming that costs are C(q) = q with q < 8.
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