EC202

INTERMEDIATE MICROECONOMICS

Suppose a monopolist produces good x and serves two markets. The goods can be transported between the two markets at no cost, so the firm must charge uniform prices in both markets. The demand schedule in the first market is P1 = 200 - 2Q1, where P1 is the price of the good and Q1 is the amount sold in the market. In the second market, the demand is P2 = 140 - Q2, where P2 is the price and Q2 the quantity. The firm's overall marginal cost is MC = 90 + Q1 + Q2. What price should the firm charge?