Problem:
Consider the monopoly with the demand function D : P = 20 –Q
Allow the cost function be C= 10+ Q + Q2
Required:
a) Compute the monopoly equilibrium.
b) Compute the consumer surplus.
c) Assume this firm practices two-part tariffs,
I) Compute the optimal output.
II) Compute the size of the optimal "membership fee".
d) Assume this firm practices perfect price discrimination,
I) Compute the optimal output,
II) Compute the total amount of money the firm will charge.