2nd-Degree Price Discrimination:

B) Note that the inverse demand functions for the high-valuation and low-valuation consumers in Figure 6.4 is p(q) = 16 − q and p(q) = 12 − q, respectively. If the monopolist could tell the two consumer types apart, what are the optimal block pricing contracts to oer these two groups?

C) If the monopolist cannot tell the two types apart and oers the contracts you found in part (b), how much surplus will the high types get from buying the low type contract?

D) If the monopolist takes the amount of money from (c) and gives a discount of that amount on the high-type package, the high types will buy the high-type package. How much money does the monopolist make in that case? Suppose that there are one consumer of each type to make your calculation easier.