Please answer Both question with explaination Thank You!! Question 13 0.5 pts A

Question

Please answer Both question with explaination Thank You!!

Question 13 0.5 pts A monopoly baby goods store has 4 customers, shown in the table below Maximum Willingness To Pay for a Baby Swing (S) 250 200 180 100 Customer Max Noah helia Penn If the monopoly store must give all customers the same price, what price should it charge for a baby swing in order to maximize revenue received? $250 $200 O $180 $100 Question 14 0.5 pts If the monopoly store can perfectly price discriminate, what is the maximum amount of revenue it can receive? $1,000 $800 O $720 O $400 O $730 $600 O $540

Explanation / Answer

Answer.)

Q13.) $180

Remember that no consumer will pay any amount any higher than its maximum willingness to pay. So accordingly,

With price $180, 3 consumers will choose to purchase it and that will provide maximum revenue of $180 x 3 = $540

With price $100, 4 consumers will choose to purchase it and that will provide revenue of $100 x 4 = $400

With price $200, 2 consumers will choose to purchase it and that will provide revenue of $200 x 2 = $400

With price $240, only 1 consumer will choose to purchase it and that will provide revenue of $240 x 1 = $240

Q14.) $730

Perfect price discrimination means charging different price from different consumers equal to consumers maximum willingness to pay. In given example, the monopoly will charge price $250 from Max for a baby swing. therefore, maximum revenue will be ( $250 + $200 + $180 + $100) = $730.

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