Question
A monopoly firm faces two markets where the inverse demand curves are Market A: PA=1402.75QA, Market B: PB=120QB. The firm operates a single plant where
A monopoly firm faces two markets where the inverse demand curves are Market A:
PA=1402.75QA,
Market B:
PB=120QB.
The firm operates a single plant where the total cost is C =
20Q+0.25QSuperscript2,
and marginal cost is m = 20 + 0.5Q.Part 2 Suppose the firm sets a single price for both markets. Using the information above, the profit-maximizing price is $86.18 and the profit-maximizing quantity is 53.37 units. Given this information, you determine that the firm will earn a profit of
$2819.942819.94.
(Round your response to two decimal places.)Part 3 Now suppose the firm is able to engage in group price discrimination. To maximize profits, the firm will produce?
units for market A and charge customers in market A a price of
$?.
And it will produce units? for market B and charge customers in market B a price of
$ ?
per unit. (Round your responses to two decimal places.)
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