Economics A firm with market power can divide its sales into two submarkets, the demands and marginal revenues of which are shown in the following diagram. S 0.80 0.70 0.60 0.50 Price, marginal revenue, and marginal cost (dollars) 0.40 0.30 0.20 MC = ATC 0.10 MRA MRB DA De 10 15 20 25 30 35 40 45 Quantity (a) How many quantities of output should the firm produce? (2 marks) (b) How many quantities should be sold to market A? How many quantities should be sold to market B? What price should be charged in each market? (8 marks) (c) Calculate the price elasticities at the prices charged in each submarket. Do these price elasticities have the expected relative magnitudes? Explain. (12 marks) (d) What is the amount of profit generated by the firm