Question
A monopolist can separate the market into two and has estimated the price elasticities of demand. For the first market, the elasticity is E1=-1.52 and
A monopolist can separate the market into two and has estimated the price elasticities of demand. For the first market, the elasticity is E1=-1.52 and for the second market, the elasticity is E2=-2.30. The cost function is given by C=45Q, where Q is the total number of its output. For the maximum profits, the monopolist will set the prices, P1 and P2.
Find P1/P2. (Answer up to 2 decimal places.)
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The Wisdom Of Crowds
Authors: James Surowiecki
1st Edition
0385721706, 9780385721707
