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- There are only two customers (X and Y), who demonstrate different reservation prices for three different products (A, B and C). MC for all products = 0.What is difference between profit under individual pricing and profit under pure bundling strategy? Customer X Customer Y Product A 5 7 Product B 9 5 Product C 2 8A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specififically, he estimates the following average demands: • Under 25: qr= 18 − 5p • Over 25: q = 10 − 2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $2 each. (a) If the market cannot be segmented, what is the uniform monopoly price? (b) If the nightclub can charge according to whether or not the customer is a student but is limited to linear pricing, what price (per drink) should be set for each group? (c) If the nightclub can set a separate cover charge and price per drink for each group, what two-part pricing schemes should it choose? (d) Now suppose that it is impossible to distinguish between types. If the nightclub lowered drink prices to $2 and still wanted to attract both types of consumers, what cover charge would it set? (e) Suppose that the nightclub again restricts itself…Multichoice company broadcasts to subscribers in Lusaka and Solwezi. The demand for each ofthese two groups are Qsz= 50 - (1/3) Ps and QUSK= 80 - (2/3) Pusk, where Q is in thousands ofsubscriptions per year and P is the subscription price per year. The cost of providing Q units.ofservice is given by C (Q) = 1000 + 30Q, where Q = Qsz + QusK. Assuming Multichoice is aMonopoly and can engage in third-price discrimination, then1. What is the profit-maximizing price and quantity in Solwezi Market?2. What is the profit-maximizing price and quantity in Lusaka Market?3. Suppose the Monopoly can only charge a single. What price should it charge and what isthe total quantity sold?
- A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demands: • Under 25: qr = 18 − 5p • Over 25: q = 10 − 2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $2 each. (a) If the market cannot be segmented, what is the uniform monopoly price?A profit maximizing monopolist with total costs C = 0.25Q2 sells in Mississauga, where demand is DM = 140 − 2P and in Brampton, where demand is DB = 180 − 2P. (a) Calculate prices and output assuming that the firm can practice ordinary price discrimination. Provide a labelled diagram. (b) An entrant with total costs C = 0.25Q2 + 1,200 threatens to enter the market in Brampton; there are no potential entrants in Mississauga. To discourage this potential entrant the firm will introduce a Predatory Pricing (Limit Output) Scheme. What prices and output should be charged in the Brampton market? No diagram is required. (c) Recalculate the monopolist’s prices and output in the Mississauga market. Why does the profit-maximizing output for the Mississauga market change when the firm engages in predatory practices in Brampton? No diagram is required.Consider a monopoly operating in two markets, TC(q) = 10q, q1=50 - p1, q2=30 - p2 3.1 Determine the prices, quantities and profit under linear pricing (hint: does the monopoly sell to both segments or only to one, and if so which one) 3.2 Determine the prices, quantities and profits for a 3rd degree discrimination 3.3 Assume that the monopoly is able to identify both types of customers. Determine the equilibrium profit for binomial pricing, Ti(qi) = Ai + pqi
- CHP is a monopoly manufactorer who faces tbge following demand curve for its product in two different country: United States ( US) and New Zealand (NZ). US = Q(us) = 200 - P(us) and new zealand: Q(nz) = 150 - 1/2 P(nz). in which Q denotes quantity and p denotes prices. the firm also faces cost function of c(Q) = 0.25 (Qus + Qnz)^2. Find the prices, pUS and pNZ, which maximise CHP profits, assuming no capacity constraints.A manager of a nightclub realizes that demand for drinks is more elastic among students and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demand for his customer types: Under 25: qr=18-5p Over 25: q=10-2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the club $2 to make. If the manager cannot identify to which group his customers belong, what is the uniform monopoly price? If the manager can identify to which group his customers belong, what price will he charge each group. Assume the manager can only charge a single price to each group. If the manager can charge a separate entry fee and a price per drink for each group, what two-part price will the manager set for reach group. Now suppose that once again it is impossible to identify which group the customers belong. Suppose the manager lowers the price of drinks to equal to marginal cost and still wanted to attract both…Suppose the MTR is a natural monopolist with constant marginal cost. Draw adiagram to indicate the profit-maximizing number of passengers, the profitmaximizing price, and the size of the profit.
- Utility supplier GasGen is a natural monopoly. This implies that:Select one:a. Economies of scale are of little importanceb. Marginal cost pricing will always yield positive profitsc. Pareto optimal pricing may bring lossesd. Private ownership is the only tenable solution Please tell me which of these is correctA city in a developing country does not have a provider of water and sanitation services, leading to poor health outcomes for its citizens. A firm is considering entering thatmarket. The cost curve is C(g) = 10 + 2q, and the inverse demand is P(g) = 10-q. Thegovernment of that city knows that, because of the high fixed cost to operate in this market, any entrant is likely to become a monopolist. Thus, they decide to implement the following regulation: the firm is not allowed to choose a price above an upper limit of p (which the government chooses and sets in the law before the firm decides to enter).There will be no transfers between the government and the firm.Assume that the firm only enters the market if it can get profits of at least zero, given the government's choice of p. Suppose that the government's goal is to maximize consumer surplus. Which of the following statements is the most correct? The government needs to set p = 2, because it's the marginal cost. That eliminatesthe…True/False Monopoly produces a product that is unique and have no close substitute.
