Consider a monopoly market.Initially, the firm sets one price to all buyers, because the firm does not have detailed information on each individual buyer.The straight-line market demand curve D₀ and the firm's average cost curve AC₀ are shown in the graph below. The firm has constant average cost of production equal to $10.Let's call the initial profit-maximizing price P₀ and the initial profit-maximizing quantity Q₀.

An opportunity to segment the market now arises, in which the firm can remove the "middle" of the market to a different segment.Specifically:

--Segment 1 has people who are willing to pay relatively high prices and people who are willing to pay relatively low prices.

First, you have been asked to picture the full demand "curve" for Segment 1.Then, you have been asked to determine the marginal revenue "curve" for Segment 1to show graphically and explain what is the marginal revenue "curve" for Segment 1.