Business, 09.10.2019 22:00 AreYouMyNewDad

4. medicaid’s rebate program guarantees that medicaid gets a fixed rebate on each unit pur- chased by medicaid consumers. the rebate is calculated as the difference between the min- imum price charged in any market and the quantity weighted average price (this is called minimum price provisioning or mpp). if the monopolist sets p1 = 50 and p2 = 30. what would the per-unit rebate payment be? note: the quantity weighted average is computed with respect to all customers. 5. for simplicity, suppose a simple average of prices (instead of a quantity-weighted price) is used to calculate the rebate payment. assuming devlin mcgregor still price discriminates, how should it adjust its prices to maximize profit under the rebate program? for this part assume that devlin-mcgregor will price in a way to serve all segments and all markets. 6. give an intuitive explanation for how the optimal prices change compared to the uncon- strained problem when no mfc provision is imposed.

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