Microeconomics 2nd Edition by Douglas Bernheim

Exercise 1

If the Ice Cream Monopoly Company from Figure 18.2 (page 669) sells to Juan [whose demand curve is shown in Figure 14.18(b) on page 524] using a two-part tariff with a per-cone price of $1.50, what is the largest fixed fee it can charge Juan and still persuade Juan to make a purchase How does its total revenue from Juan under this two-part tariff compare to its total revenue from Juan when it sells Juan four cones, each priced at Juan's willingness to pay for it What is its total profit from Juan