Suppose that a price discriminating monopolist has segregated its market into two groups of buyers. The first

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Suppose that a price € discriminating monopolist has segregated its market into two groups of buyers. The first group described by the demand and revenue data that you developed for problem 1. The demand and revenue data for the second group of buyers is shown in the accompanying table. Assume that MC is $13 in both markets and MC = ATC at all output levels. What price will the firm charge in each market? Based solely on these two prices, which market has the higher price elasticity of demand? What will be this monopolist€™s total economic profit?

Quantity Total Marginal Price Demanded Revenue Revenue $71 $63 63 63 47 55 110 34 48 144 24 42 4 168 17 37 185 13 33 198

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Microeconomics Principles, Problems and Policies

ISBN: 978-1259450242

20th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

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Question Posted: Apr 24, 2018 05:57 AM

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Suppose that a price discriminating monopolist has segregated its market into two groups of buyers. The first

Question:

Quantity Total Marginal Price Demanded Revenue Revenue $71 $63 63 63 47 55 110 34 48 144 24 42 4 168 17 37 185 13 33 198 5 203 29

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Answer Price in market 1 48 price in market 2 33 the second market has the higher price elasticity o...View the full answer

Microeconomics Principles, Problems and Policies

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