Suppose a monopolist faces two types of consumers. In type I there is
only one person whose demand for the product is given by : P Q I − =100 ,
where P represents price of the good. In type II there are n persons, each
of whom has a demand for one unit of the good and each of them wants to
pay a maximum of Rs. 5 for one unit. Monopolist cannot price
discriminate between the two types. Assume that the cost of production for
the good is zero. Does the equilibrium price depend on n ? Give reasons
for your answer.
I get this answer : Up to n=499, his price should be 50, and after that, i.e., n>499, he should charge 5.