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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

3. A monopolist has two geographically segmented markets. The demand curves for these market segments are:91=500-3p192=800-4p2where qi and pi, i =1,2, are the outputs and prices for segments 1 and 2 respectively. Suppose thefirm has a constant marginal cost for each segment of 50 per unit and no fixed costs.a) What are the profit-maximising prices and outputs in the two market segments, and hence the firm's profits?(13 marks)b) If the monopolist is forced by regulators to charge the same price in both market segments, what is the profit-maximising price and the firm's profit level?(10 marks)c) 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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