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variable relat… Show more Assume that there are two comple

Paper help Economics variable relat… Show more Assume that there are two comple

Economics

variable relat… Show more Assume that there are two comple

variable relat… Show more Assume that there are two complementary products, A and B, where the quantity of B is variable relative to a single unit of A. There are two types of consumers, High and Low-demand. Their inverse demand curves and the constant marginal costs are as follows: Ph= 20-qh Pl=16-2ql (I assume H= high and l = low) MCb=2 (a) If the firm has a monopoly in product A and product B is sold in a competitive market, then what is the profit-maximizing tie-in sale price of product A? (b) If the firm has a monopoly in both products, then what is the profit-maximizing tie-in sale price of product A? (c) If the firm figures out a way to ‘technologically tie’ products A and B (such that each product A comes with a fixed quantity of B), then what are the profit-maximizing (block) prices for each consumer-specific tied product? • Show less

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