Oq – t, where takes on a value of 13 for H-type consumers, or 9 for L-type consumers. A manufacturer of flash drives has

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Oq T Where Takes On A Value Of 13 For H Type Consumers Or 9 For L Type Consumers A Manufacturer Of Flash Drives Has 1 (61.03 KiB) Viewed 31 times

Oq – t, where takes on a value of 13 for H-type consumers, or 9 for L-type consumers. A manufacturer of flash drives has a profit function art 972 where t is the price charged for a flash drive and q? is the cost of producing a drive whose capacity is q gigabytes. A consumer of type o has a utility function u There are 10 consumers of each type. A consumer gets zero utility if she does not buy. Answer the following. If rounding is needed, round to 3 decimal points. a) 0.25 point) Suppose (@Lot L) is the optimal (profit maximising) capacity-price bundle for L-type consumer under complete information. What is the value of L? b) (0.25 point) Suppose (auth) is the optimal (profit maximising) capacity-price bundle for H-type consumer under complete information. What is the value of th? C) (0.5 points) What is the seller's overall profit under complete information? For part d) - i), assume information is asymmetric. d) (0.5 point) Suppose that the seller continues to offer the capacity-price bundles that maximises his profit under complete information: that is, he offers (@pt) and ( @th). What is the utility for the type 0, consumer from buying the hath) bundle? That is what is ullâu, th)? e) (1 points) What is the utility for the type o consumer from buying the û litr) bundle? That is what is un (@L, 6L)? f) (1 point) What are the seller's profits if he offers the bundles (@l, L) and (th) when information is asymmetric? Now suppose the seller decides to offer a menu of capacity-price bundles (9Lt) and (9h, th) to incentives the two types of consumers to sort themselves out. Answer part g) to i) in this context. 9) (1 point) For H-type consumer, what is the optimal (profit maximising) level of qu? h) (1 point) Suppose (97,t) is the optimal (profit maximising) capacity-price bundle for L-type consumer under asymmetric information. What is the value of ti? D) (0.5 points) What is the seller's overall profit under asymmetric information if the seller offers a menu of profit maximizing capacity-price bundles (qu, tL) and (qH, th) to consumers?