Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. a manufacturer of flash drives has a profit functi

A Manufacturer of flash drives has a profit function of P= t - q2where t is...

60.2K

Verified Solution

Question

Economics

A Manufacturer of flash drives has a profit function ofP= t - q2where t is the price chargedfor a flash drive and q2 is the cost of producing adrive whose capacity is q gigabytes. A consumer of type'x' has a utility function of u =xq-t, where 'x' takes on the value of 8 forH-type consumers or 6 for L-type consumers. There are 100 consumersof each type. A consumer gets zero utility if she does notbuy.

Calculate the optimal SEPARATING CONTRACT(qL,tL) and (qH,tH)under ASYMMETRIC INFORMATION

Answer & Explanation Solved by verified expert
3.8 Ratings (450 Votes)
If the consumer is L type contract L provides him utility 0 butif he chooses H contract then his    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Calculate the present value of the following annuity streams: a. $5,000 received each year for 6 years...

Finance
Q

Name the four (4) factors involved in highway crashes. Explain or define Grade-Separated highway. Define and explain...

Civil Engineering
Q

Which of the following is a correct sequence of levels in life s hierarchy proceeding...

Biology
Q

Remaining Time 1 hour 14 minutes 41 seconds Question Completion Status Solve the right triangles...

Geometry
Q

A marble is drawn from a box containing 4 yellow 5 white and 18 blue...

Basic Math
Q

Solve for the unknown by using the quadratic formula 3 x 8X 5 0 4...

Algebra
Q

Factor each polynomial or identify it as irreducible 3n6 12n4

Algebra
Q

Q2. While travelling to Dammam, Qassim is admitted to hospital for major car accident and...

Accounting
Q

Sumicon Widgets LLC has a 7 year maintenance contract with Turnkey Inc. that costs $1,000...

Accounting
Q

Danolin Painting, LLC is bidding on painting buildings in a large apartment complex. The company...

Accounting
Q

You have attended few classes on how to make soy drink for commercial purpose. Using...

Accounting
Q

Choose the correct option: Question: The carrying amount of accounts receivable Options: a)...

Accounting