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# Undergrad Economics Course HW Question

1. Hi.

I am an undergraduate student majoring in economics, and I am stuck on this homework question.

I hope someone can help me out with this one.

A monopoly has two types of customers and is able to charge them the same two-part tariff.
It knows that Type 1’s demand is Q1 = a1 − bp, and Type 2’s is Q2 = a2 − bp, where a2 > a1. Derive
expressions for the optimal unit price p and fixed fee T, assuming the monopoly has constant marginal costs
m and that it is optimal to sell
a) to both types;
b) only to Type 2.

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