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Author Question: Suppose a monopoly produces film and cameras. Consumers demand pictures, which require film and one ... (Read 155 times)

TFauchery

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on: Jul 1, 2018
Suppose a monopoly produces film and cameras. Consumers demand pictures, which require film and one camera.
 
  Two different types of consumers have the following demand for film,
  qA = 100 - 10p and qB = 80 - 10p. The monopoly cannot price discriminate in the market for film or the market for cameras, but it can bundle the products. The monopoly produces film at a constant marginal cost of 1 per roll. What price will the monopoly set for film and for cameras?

Question 2

A game includes
 
  A) a strategy.
  B) payoffs.
  C) rules.
  D) All of the above.


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kkenney

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Reply #1 on: Jul 1, 2018
Answer to Question 1

Profit equals (8 - p)  (80 - 10p) + (p - 1)(180 - 20p).
Maximizing profit subject to p yields 20p - 160 + 180 - 40p + 20 = 0 or 20p = 40 or p = 2.
At that price, the firm charges (1/2)(8 - p)(80 - 10p) = 180 for a camera.

Answer to Question 2

D


TFauchery

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Reply 2 on: Jul 1, 2018
Wow, this really help

jackie

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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