A monopoly firm produces at a constant MC of $10 per unit and has no fixed costs. The demand curve that a typical indivi

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A Monopoly Firm Produces At A Constant Mc Of 10 Per Unit And Has No Fixed Costs The Demand Curve That A Typical Indivi 1 (44.66 KiB) Viewed 21 times

A monopoly firm produces at a constant MC of $10 per unit and has no fixed costs. The demand curve that a typical individual has for the product is Qd = 40 - 2P. a. What price would a traditional monopoly charge, how many units of output would each individual purchase, and how much profit would be made off of each individual? b. Suppose the monopolist can use a two-part pricing scheme where each consumer must pay a membership fee for the right to be able to buy the product, and then pays a price per unit. What is the optimal membership fee for each consumer and what price should the monopolist charge per unit? How much profit does the monopolist make off of each individual now? c. Suppose that instead of using a two-part pricing scheme, the monopolist drops the membership fee and instead decides to only sell its output in blocks that contain multiple units of output. Thus. consumers can either buy no units of output at all, or buy the block of output you determine is optimal. In order to maximize profits, how many units of output should the monopolist include in one block, and how much should the monopolist charge for this block? What is the average price per unit if a consumer purchases this block? How much profit does the monopolist make off of each individual now?