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Dove is a big American manufacturer of hair and skin care products. Suppose Dove is a monopoly in the market for body wash. It has
Dove is a big American manufacturer of hair and skin care products. Suppose Dove is a monopoly in the market for body wash. It has figured out that the demand for body wash for women is given by Dw(p) = 40-p while the demand for men is given by Dm (p) = 40 - 2p. The cost of producing y units of body wash is C'(y) = 1y. Dove recently received a lot of negative media coverage for what is called the "pink-tax," which is the practice of charging women a premium for the same product. Due to the building social pressure, Dove decides to no longer price discriminate. In other words, Dove now faces a combined demand function of both genders. 12. Derive the inverse combined demand functions P(y). 13. Derive the marginal revenue function. 14. How many units of body wash does Dove optimally sell in total? 15. What is the monopoly price for body wash? 16. How many units of body wash are sold to each gender? 17. Are women better off with or without the price discrimination? 18. Are consumers as a whole better off with or without the price discrimination
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