Question
A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and West Coast). Demand and marginal revenue for the two
A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and West Coast). Demand and marginal revenue for the two markets are:
East Coast: P1 = 15 -Q1
West Coast: P2 = 25 - 2Q2
The monopolist's total cost is C = 5 + 3(Q1 + Q2). What are prices, outputs, and profit if the monopolist can price discriminate?
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Principles of Economics
Authors: Robert Frank, Ben Bernanke
5th edition
73511404, 978-0073511405
