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A monopolist has two geographically segmented markets. The demand curves for these market segments are: 1 = 500 31 2 = 800 42 where and
A monopolist has two geographically segmented markets. The demand curves for these market segments are: 1 = 500 31 2 = 800 42 where and , = 1,2, are the outputs and prices for segments 1 and 2 respectively. Suppose the firm has a constant marginal cost for each segment of 50 per unit and no fixed costs. 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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