A monopolist knows there are two customers with different demand curves for two differently sized bags of potato chips. Customer S would only buy the small bag and has a willingness-to-pay given by P-160-2q (where P denotes the price and q denotes the quantity). Customer L would buy the large bag and has a willingness-to-pay given by P-200-q. The monopolist does not know who is customer S and who is customer L. Marginal cost of production is zero. AFTER second degree price discrimination, how large are the bags? q5-40, qL-200 Ⓒq5-0, qL-200 q5-80, qL-200 Oq5-0, qL-100 none of the above.

A monopolist knows there are two customers with different demand curves for two differently sized bags of potato chips. Customer S would only buy the small bag and has a willingness-to-pay given by P-160-2q (where P denotes the price and q denotes the quantity). Customer L would buy the large bag and has a willingness-to-pay given by P-200-q. The monopolist does not know who is customer S and who is customer L. Marginal cost of production is zero. AFTER second degree price discrimination, how large are the bags? q5-40, qL-200 Ⓒq5-0, qL-200 q5-80, qL-200 Oq5-0, qL-100 none of the above.

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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