12.3. Suppose a monopolist producing Q units of output faces the demand curve P ! 20 ...
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12.3. Suppose a monopolist producing Q units of output faces the demand curve P ! 20 " Q. Its total cost when producing Q units of output is TC ! F # Q2
, where F is a fixed cost. The marginal cost is MC ! 2Q.
a) For what values of F can a profit-maximizing firm charging a uniform price earn at least zero economic profit?
b) For what values of F can a profit-maximizing firm engaging in perfect first-degree price discrimination earn at least zero economic profit?
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