There are two equally populated groups of consumers, A and B. Assum each consumer can consume at most 2 units. Their willingness to pay are
A. 10 for the first unit, 5 for the second unit
B. 8 for the first unit, 6 for the second unit
Assume they they buy if price exactly equals to willingness to pay. The monopolist can produce the good at a constant marginal cost 3.
a. describe efficient allocation of the good
b. describe the profit-maximizing price when no price discrimination is allowed.
c. describe the profit maximizing 1st degree price discrimination strategy
d. describe the profit maximizing 2nd degree price discrimination strategy
e. describe the profit maximizing 3rd degree price discrimination strategy