Heterogeneous consumers. A monopolist offers a single price to two consumers with the following demand functions: p1(q1) = 120 − q1 p2(q2) = 45 − 1 2 q2. The firm experiences a constant marginal cost of production, c = 10.
a) Graph aggregate demand, marginal revenue and marginal cost on a single graph
b) Find the optimal price and resulting demands of consumers 1 and 2 (P ∗ , q∗ 1 and q ∗ 2 )