Monopoly provision of a network 5 2. There are multiple equilibria At p< $25, there is more than one equilibrium value off At p=$2222 both f (p)=1/3 and fN(p)=2/3 are possiblef values Lower fraction may be unstable(tipping This group is comprised of consumer with top one-third of v values The addition of one more consumer will raise willingness to pay sufficiently that consumers with the next highest third of v, values will be willing to pay and we will move to the fy equilibrium The loss of one consumer will lower the willingness to pay of that same top one-third and demand will fall to zero at p=$22227 Monopoly Provision of a Network 5 • 2. There are multiple equilibria – At p < $25, there is more than one equilibrium value of f – At p = $22.22 both fL (p) = 1/3 and fH(p) = 2/3 are possible f values – Lower fraction may be unstable (tipping) • This group is comprised of consumer with top one-third of vi values • The addition of one more consumer will raise willingness to pay sufficiently that consumers with the next highest third of vi values will be willing to pay and we will move to the fH equilibrium • The loss of one consumer will lower the willingness to pay of that same top one-third and demand will fall to zero at p = $22.22