Price Discrimination DannyFi can provide internet service at 500 Mbps, but it can slow down the service to 20 Mbps if it

[answerhappygod]

Price Discrimination Dannyfi Can Provide Internet Service At 500 Mbps But It Can Slow Down The Service To 20 Mbps If It 1 (363.34 KiB) Viewed 35 times

Price Discrimination DannyFi can provide internet service at 500 Mbps, but it can slow down the service to 20 Mbps if it wants. There are two types of consumers, with the following valuations Corporate Families 20MBS $30 $20 500MBS $100 $40 Suppose there are 100 potential corporate consumers and 100 potential family consumers. DannyFi has a marginal cost of zero. (a) Suppose DannyFi can distinguish families from businesses. What speed and price should it offer businesses? What speed and price should it offer families? (b) Now say DannyFi cannot distinguish families from businesses and considers offering both 500 Mbps and 20 Mbps services. What price would DSL charge for each service? Should DSL offer the two services? (c) The National Communications Commission (NCC) forces DannyFi to charge one price for internet and forbids any slowdown in service. What price will it charge? Calculate the lost revenue due to the regulation.