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A monopolist sells its products in two countries and resale from customers is not possible. The inverse demand curve for the monopolist is p 1
A monopolist sells its products in two countries and resale from customers is not possible. The inverse demand curve for the monopolist is p1=15023Q1 in country 1 and p2=1252Q2 in country 2. Production takes place in country 1, at a constant marginal cost per product of m=30 . Selling its product in country 2 also requires a transportation cost, which is t=5 per product.
Determine for both countries: 1) the monopolist's optimal price and quantity; 2) the price elasticity of demand at the monopolist's optimum; and 3) the Lernerindex.
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