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3 . A monopolist has two geographically segmented markets. The demand curves for these market segments are: 9 1 = 5 0 0 - 3
A monopolist has two geographically segmented markets. The demand curves for these market segments are:ppwhere qi and pi i are the outputs and prices for segments and respectively. Suppose thefirm has a constant marginal cost for each segment of per unit and no fixed costs.a What are the profitmaximising prices and outputs in the two market segments, and hence the firm's profits? marksb If the monopolist is forced by regulators to charge the same price in both market segments, what is the profitmaximising price and the firm's profit level? marksc Tabulate the welfare of consumers in the two market segments and for the monopolist.Hence, describe who is better off and who is worse off under uniform pricing.
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