Assume that every consumer has the inverse demand function P = 10 – Q and that marginal cost is always zero.  There are 10 consumers. The monopolist wants to maximize profits by designing a two-part tariff.  Calculate the two parts of the tariff, and calculate profits.

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 10SQP
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Assume that every consumer has the inverse demand function P = 10 – Q and that marginal cost is always zero.  There are 10 consumers. The monopolist wants to maximize profits by designing a two-part tariff.  Calculate the two parts of the tariff, and calculate profits.

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