Duck please help!

[Pooja]

CONTENTS DELETED

The author has deleted this message.

[duck]

Hi MR.. :)

Its given in the question "consumer will demand the unit for consumption if his valuation for it is greater than or equal to the price."

27) If c=0 then, monopolist would charge p=4. So, consumer 2 and 3 will buy the good. Hence, Profit = 8.
If monopolist charges any other price then, profit will be less than 8.

28) They've asked us to find the value of "c" for which Monopolist produces either 1 or 2.
Now, if c=1 then, monopolist will charge either p=4 (ie. quantity sold=2 and profit=6) or p=7( ie. quantity sold=1 and profit=6).

[Pooja]

Hey Duck, I got the explanation. But I am still stuck at why will the monopolist charge 4? No relation about that is mentioned in the paper.

[duck]

Its because at p=4, profits will be maximised.
No relation is given in the question..because thats what you need to find.. :)

[mini]

is there a solution key to this paper?

[Pooja]

Thanks Duck. I did try this but couldn't get it then. Something is going wrong with me as the day is approaching. :(

[Ankit]

This problem is like the housing problem in varian workouts. You can refer that also for explanation.