You are a profitmaximizing monopolist whose marginal cost eq

You are a profit-maximizing monopolist whose marginal cost equals $5. Each customer has demand MWTP = 15 - Q. You have chosen the profit-maximizing two-part tariff. How much money, in total, do you receive from each customer? (Remember, do not enter the $.)

Solution

The marginal willingness to pay is the reservation price which is the P=15-Q and marginal cost is 5 then optimal tax is when P=MC implies 15-Q=5 or Q= 10 units and P=5 which is the per unit tax rate while the fixed fee will be the entire consumer surplus which is (1/2)*10*10 =50 units. This is under the assumption that all consumers are of the same type. the optimal tariff is 50 +5Q and total money received will be 100.