Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized by a demand curve . In addition, assume that consumers live for two periods , and a monopoly sells motorcycles that lasts for two periods. The marginal cost of motorcycle is $5. Answer the following questions.   a) What is the profit for a renting monopoly? b) What is the profit for a selling monopoly?

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Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized by a demand curve . In addition, assume that consumers live for two periods , and a monopoly sells motorcycles that lasts for two periods. The marginal cost of motorcycle is $5. Answer the following questions.

 

a) What is the profit for a renting monopoly?
b) What is the profit for a selling monopoly? 
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