Amonopolist produces output with constant marginal cost equal to 1. there are two of consumers that are potentially in the market for the good. consumer a has inverse demand function pa(x) = 7 − x, and consumer b has inverse demand function pb(x) = 5 − x.

(i) what are the pareto efficient levels of consumption of the good by consumers a and b? call these x∗a and x∗b respectively.
(ii) if the monopolist can identify which consumer is which, and can charge them different prices, what price will each consumer be charged? what profit does the monopolist make?
(iii) if the monopolist can identify which consumer is which, and can charge a two-part-tariff to each, what price schedule will each consumer face? that is, what will be the fixed "entry fee" charged to each person, and what will be the marginal price per unit paid? what is the monopolist’s profit now?
(iv) suppose the monopolist cannot identify which consumer is which. what is the best pair of purchase options (xa, ra) and (xb, rb) the monopolist should offer? (hint: you’ll need to show that xb = 2.) what is the firm’s profit?

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.