Comsider monopolist facing two consumers with the tollowing two wir demand curses for its product P₁=200-4Q₁, and P₂=122-6Q₂, Assume tised costs are tere and the marginal cost is $8. Assume that price per unit is equal to marginal cost
a) The monopolist decides to use a two-part tariff that permits both consumers to stay m the market. Solve for each consumer's output, fixed fee and amonopolist profits
b) Assume the monopolist decides not to serve the low demant consumer, Solve for output, fixed fee and monopolist profits. is the monopolist better off as a result of eliminating the low-volume comuner from the market?