You are the manager of a monopoly. Your analytics department estimates that a typical consumer's Inverse demand function for youfirm's product is P= 100 -400, and your cost function is a = 200.a. Determine the optimal two-part pricing strategy.Per-unit fee: $20Fixed fee: $b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?

A monopoly is the sole producer of a good thus having maximum market power hence it acts as a price…

are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demandi s product is P= 100 -400, and your cost function is aa = 200. etermine the optimal two-part pricing strategy. unit fee: $ 20 d fee: $ ow much additional profit do you earn using a two-part pricing strategy compared with charging this consumera

are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demandi s product is P= 100 -400, and your cost function is aa = 200. etermine the optimal two-part pricing strategy. unit fee: $ 20 d fee: $ ow much additional profit do you earn using a two-part pricing strategy compared with charging this consumera

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.5P

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Question

You are the manager of a monopoly. Your analytics department estimates that a typical consumer's Inverse demand function for you
firm's product is P= 100 -400, and your cost function is a = 200.
a. Determine the optimal two-part pricing strategy.
Per-unit fee: $
20
Fixed fee: $
b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?

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