Problem 1. Market Entry (65 points) Setup For this problem, you will need to read the paper by Camerer and Lovallo (1999) posted on NYU Courses. We…
September 3, 2020
Prior to beginning work on this discussion, read Tim Worstall’s article, One Benefit of Nancy MacLean’s Democracy in Chains – Public Choice and Rent…
September 3, 2020

Price Discrimination

There are two types of consumers with inverse demands

P1= 20−2Q1 and P2= 16−2Q2. Assume for now that N1=N2 = 1. There is a monopolist providing the good with a marginal cost of 4.


What is the Uniform price that a monopolist would charge?


What would be the prices that a monopolist would charge if it could price discriminate (3rd degree)?


What would the prices be under 2-part pricing? (please include the membership fee and the unit price)


What would be the optimal bundles if the monopolist could not distinguish between consumer types

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