Question: Mo-Town Hydro is the sole electric supplier in Mo-Town that has cost function \(0.05y\) (costs are measured per kilowatt-hour). Consumer 1 is a low-income customer with a demand function \(y_{1}=100-500 p\). Consumer 2 is a higher income (than Consumer 1 ) customer with a demand function \(y_{2}=250-1000 p\). (i) Determine what would be the outcome (equilibrium price and quantity) if Mo-Town Hydro could observe income of Consumer 1 and Consumer 2 and force price discrimination. [your answer should include measurement of consumers' surplus and producer’s surplus. (ii) Determine what would be the outcome (equilibrium price and quantity) when Mo-Town Hydro cannot observe the income level of Consumer 1 and Consumer 2 but the company has an idea about the different types of income level and they can practice price discrimination by offering self-selecting prices. (iii) Theoretically explain in details about the type of Price Discrimination Mo-Town Hydro is practicing. (iv) Draw demand curve for each type, graphically illustrate all details for part (ii), and show all changes in consumer's surplus and producer's surplus. (v) Can you determine the equilibrium price and quantity in the market? If your answer is YES, derive the optimal prices and quantities. If your answer is NO, justify your answer.

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