Question

1. A monopoly has the following demand and cost functions. You will use these equations for the entire problem, but parts (a), (b), and (c) are all separate so you will get different answers in each. Show your work and box in your final numerical answers.
   Demand: P = 200 - 5Q. Cost: C = 3Q² + 20Q.
   1. This monopoly uses standard pricing (no advanced pricing strategies.) Calculate the price the company will charge, their quantity, and profit.

P= 170

Q= 20

Profit = 1800

b. Instead of the standard pricing above, this firm tries to use Block Pricing. Calculate the quantity that the firm will sell as one “block,” the price they will charge for that block, and their profit. I will not grade your graph unless it helps you get partial credit, but you need to draw a graph with Demand and MC in order to solve this

P= 164

Q= 24

Profit = 2160

c. Instead of parts A & B, the firm gets access to extremely precise personal data on their customers and is able to practice First Degree Price discrimination. Find the quantity they will sell and their profit. You might want to draw out a graph on your own paper, but you do not need to show your work here for reasons that should become clear.

Quantity =

Profit =

In a few words, why didn’t you need to do any (additional) math?

I really just need help with C but figured I would include my answers for A and B incase they would be of any help. Please help with part c especially the last question because I am not sure I understand.

Answer 1