Consider the market for the G-Jeans (the latest fashion among people in their late thirties). GJeans are sold by a single firm that carries the patent for the design. On the demand side, there are n^H >0 high-income consumers who are willing to pay a maximum amount of VH for a pair of CJeans, and n^L > 0 low-income consumers who are willing to pay a maximum amount of VL for a pair of G-Jeans. Assume that V^H > V^L 0 and that each consumer buys only one pair of jeans. Suppose that the G-Jeans monopoly cannot price discriminate and is therefore constrained to set a uniform market price. a. Draw the market aggregate-demand curve facing the monopoly.
b. Find the profit-maximizing price set by G-Jeans, considering all possible parameter values of nH, nL, VH and VL. Assume that production is costless.