There is a monopolist and two groups of consumers, students andgeneral consumers. The total demand of students is 𝐷1(𝑝) = 10−𝑝, while the total demand of general (non-student)consumers is 𝐷2(𝑝) = 40 − 2𝑝. The monopolist’s (short-run) variable cost function is 𝑐(𝑞) = 2𝑞. Throughout thisquestion, the monopolist uses linear pricing.(a) [5 marks] Discuss reasons why the demands of the two groups may be different. For the purpose of thisquestion, assume that every consumer has unit demand. (Limited to 100 words.)(b) [15 marks] Let us assume that the monopolist sets the same price for both groups of consumers. The problemthen becomes a monopolist’s problem facing the market demand 𝐷1 + 𝐷2. Find the monopolist’s optimalprice, consumer surplus and producer surplus.(c) [20 marks] Now assume that the monopolist sets a price for students and a potentially different price for non-students. Find the optimal pricing, consumer surplus and producer surplus.(d) [5 marks] Explain why the monopolist needs to check stude

Given a monopolist who has identified two submarkets or group of buyers for its product with demand schedule: 𝐺𝑟𝑜𝑢𝑝 1: 𝑄1𝐷=40 − 5𝑃1 𝑎𝑛𝑑 𝐺𝑟𝑜𝑢𝑝 2: 𝑄2𝐷=60 −10𝑃2 The short run total cost curve of the monopolist is: 𝑆𝑇𝐶: 𝐶(𝑄)= 0.25𝑄2+120, where 𝑄 = 𝑄1+ 𝑄2, with 𝑄1 𝑎𝑛𝑑 𝑄2 as quantities in submarkets 1 and 2 respectively. 𝑃1 𝑎𝑛𝑑 𝑃2 are the units prices in (rands) in submarkets 1 and 2 Find: a) The profit maximizing outputs. (9) b) The profit maximizing price for each submarket. (4) c) The maximum total revenue and total cost for the submarkets (4) d) The monopolist’s profit for the submarkets (2) e) Verify that this combination gives the maximum profit. (6) ..

Suppose a monopolist faces a per period demand curve having the form: P = 11 – 0.005Q. Her total cost function is given by: TC = 0.5Q. This monopolist is able to practice second degree price discrimination, by selling off batches of her product along the demand curve. She chooses two prices: $9 per unit and $5 per unit. What is the consumer surplus in each period? Group of answer choicesConsumer Surplus = $4,000.Consumer Surplus = $2,400.Consumer Surplus = $1,600.Consumer Surplus = $2,800.Consumer Surplus = $2,000.

Suppose a monopolist faces a market demand curve of the form: P = 122 – 0.2Q. This monopolist has a total cost curve given by: TC = 2Q. If the government were to regulate this monopolist and require them to charge a price equal to average cost, this price would be equal to $_____, and the monopolist would make a profit of $______.Group of answer choices2; 36,000.0; 0.2; 0.61; 17,995.62; 18,000.

Item7Item 7Suppose that a monopolist can segregate his buyers into two different groups to which he can charge two different prices. In order to maximize profit, the monopolist should charge a higher price to the group that has: multiple choicethe higher elasticity of demand.the lower elasticity of demand.relatively richer members.

Suppose a monopolist lowers the price of its good, this would cause consumers to: A. continue to buy the same amount B. buy more or less, depending on elasticity of demand C. buy more D. buy less