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6A monopoly faces two types of customers with the following inverse demand curves: TypeA: P = 6 Q/400 Type B: P = 5 - Q/800
6A monopoly faces two types of customers with the following inverse demand curves: TypeA: P = 6 Q/400 Type B: P = 5 - Q/800 The marginal cost is $1. a. If the monopoly is able to maintain separation between the two markets and can prevent arbitrage, what quantities will it sell to the two types of customers and at what prices? (4] b. How much profit would the firm stand to lose and how much consumer surplus would be gained if the rm is unable to exercise price discrimination? [6]
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