Question
A monopoly sells its good in the U.S. and Japanese markets.The American inverse demand function is pa=120-Qa, and the Japanese inverse demand function is Pj=100-2Qj,
A monopoly sells its good in the U.S. and Japanese markets.The American inverse demand function is pa=120-Qa, and the Japanese inverse demand function is Pj=100-2Qj, where both prices, pa and pj, are measured in dollars.The firm'smarginal cost of production is m = $20 in both countries.If the firm can prevent resales, what price will it charge in both markets? (Hint: The monopoly determines its optimal (monopoly) price in each country separately because customers cannot resell the good.) The equilibrium price in Japan is $ ____. (round your answer to the nearest penny). The equilibrium price in the U.S. is $ nothing. (round your answer to the nearest penny)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started