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Question: uppose that there is a monopolist with two units of...

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uppose that there is a monopolist with two units of a durable good. There are only two consumers, where one consumer has a willingness to pay of 40 and the other has that of 30. The market for the durable good only lasts two periods. In each period the monopolist sets a price and the consumers decide whether to purchase or not. Sup both consumers have the same discount factor 6 and the monopolist has a discount factor η pose that Q5. Under what condition on δ and η does the consumer with the higher willingness to pay only buy the good in period 1 at the monopolists profit-maximizing prices? (a) 2 (2+6)/3 (b) 2 (1+2n)/3 (c) η 2(1 + δ)/2 (d) 12 (1 + η)/2 (e) n2 (1+36)/4 Q6. When δ-07 and η 0.95, what is the profit-maximizing price in period 1 for the monopolist? (a) 30 (b) 35 (c) 33 (d) 37 (e) 40 Q7. When δ-0.95 and η 07, what is the profit-maximizing price in period 1 for the monopolist?

, . 30 35 33 37 40 33334 abcd e 2

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