Question
1. A monopolist sells in two markets. What conditions must hold for the firm to be able to charge different prices in the two markets?
1. A monopolist sells in two markets. What conditions must hold for the firm to be able to charge different prices in the two markets?
Suppose that the monopolist is able to charge different prices in the two markets. The inverse demand curve in market 1 isp1=169-0.4q1.The inverse demand curve in market 2 isp2=225-0.8q2.The firm's total cost function isC(q1+q2)=(q1+q2)2.
2a. What is the firm's optimal choice of q1?
2b. What is the firm's optimal choice of q2?
2c. What price does the firm set in market 1?
2d. What price does the firm set in market 2?
2e. Suppose that the monopolist can no longer price discriminate and must charge the same price in both markets. If this is the case, what price will the monopolist set?
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Local Consumption And Global Environmental Impacts Accounting, Trade-offs And Sustainability
Authors: Kuishuang Feng, Klaus Hubacek, Yang Yu
1st Edition
1317577272, 9781317577270
