Consider a monopolist who is faced with the market demand curve P = 10 - Q

Subject:EconomicsPrice:2.87 Bought7

Share With

Consider a monopolist who is faced with the market demand curve P = 10 - Q. Its total cost is given by 2Q.

a. If the monopolist has to use one price, what would be profit maximizing price?

b. If the monopolist can use two part tariff, what would be the entrance (to the market) fee and the price for each unit of the good?

c. What is the difference between (a) and (b) from the perspectives of consumers, monopolists, and the society as a whole.