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# Please show me how to solve the following answers: The restaurant serves two types of customers a month. Customer X and customer Y. There about 1000...

1.             The restaurant serves two types of customers a month. Customer X and customer Y. There about 1000 customer X and 100 customer Y.  Customers Y are willing to pay each is \$5 for a meal. Each X's willingness to pay is \$10. Each will purchase only one meal. The restaurant's marginal cost per meal is constant at \$3, and there is no fixed cost.

a.        Suppose the restaurant cannot price-discriminate and charges both X and Y the same price per Meal. If the restaurant charges \$5, who will buy the meal and what will the restaurant's profit be? How large is consumer surplus?

b.        If the restaurant charges \$10, who will buy the meal and what will the restaurant's is profit be? How large is consumer surplus?

c.        Assuming the restaurant can price-discriminate between X and Y by requiring X to show their ID, charging them \$5 and Y \$10, how much profit will the restaurant make? How large is consumer surplus?

a both y and X buys profit \$2200 consumer surplus \$ 5000... View the full answer

• For question C, how can Y customers pay if they are charged \$10 yet they are only willing to pay \$5?
• stevenprushsprush
• May 08, 2018 at 10:04pm
• I think I have considered it wrong, it should be X buys profit \$7000 consumer surplus \$ 5000
• ujjawal2610
• May 09, 2018 at 9:04am
• but one more point is, this is not correct with price discrimination
• ujjawal2610
• May 09, 2018 at 9:05am
• what do you mean it's not correct with price discrimination? I'm sorry I'm confused.
• stevenprushsprush
• May 09, 2018 at 12:57pm

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