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2. A monopolist has a constant marginal cost of $2 per unit and no xed costs. He faces separate markets in Alberta and Saskatchewan .

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2. A monopolist has a constant marginal cost of $2 per unit and no xed costs. He faces separate markets in Alberta and Saskatchewan . He can set one price, p4 , for buyers in Alberta and a different price, p5 , for buyers in Saskatchewan. If demand in Alberta is given by 95101,): I000 7003, , and demand in Saskatchewan is given by qs (p3 ) = 3,200 400p: , then, at the prot-maximizing prices [Pf . p? ) b pf-P"=-3 pf-p\"=0 d pfp'\"=1 M

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