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A monopolist faces two different groups of demand. The first group is represented by P = 2(1 - Q) and the second by P =
A monopolist faces two different groups of demand. The first
group is represented by P = 2(1 - Q) and the second by P = 1 - Q.
Assume the marginal costs to serve each group is zero, and there are no fixed
costs.
If the monopoly is unable to treat the two groups as separate, what is the
profit maximizing price/quantity and maximal profits?
If the monopoly is able to practice third degree price discrimination, what is the
profit maximizing price/quantity and maximal profits?
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