Question

Suppose this monopolist can price discriminate across its customers and sets 2 prices in the market. Let P M represent the standard (single price) monopoly price (or list price ) and Q M the standard monopoly quantity. Suppose the monopolist knows that customers with reservation prices less than P M will always use a coupon to receive a discount price P D , while customers with reservation prices greater than or equal to P M always pay the higher list price P M . This set-up is precisely the one we considered in class and in homework. The monopolist will choose a discount price of ____ and sell ____ units of the good in the discount market.

Answer 1

Answer:

hello your question is incomplete attached below is the missing part

answer: Pd = 1658 , Qd = 42

Explanation:

The monopolist will choose a discount price of ( Pd ) = 1658 and sell 42 units of the good in the discount market

since the standard price is at $1800 and the Qm ( standard monopoly quantity) is at 200 for the Monopoly to be profitable the amount of good to be sold to customers with reservation prices greater than or equal to standard price should be greater than the good offered at discount price and also the discount price after using a coupon should be lower than the standard price (Pm)