Question
monopolist sells output in two markets, North and South, and the monopolist is able to charge different prices to consumers depending on where they live.
monopolist sells output in two markets, North and South, and the monopolist is able to charge different prices to consumers depending on where they live. Demand in the North is given by QN = 120 - PN. Demand in the South if given by QS = 60 - PS. The monopolist's cost function is given by C(QN,QS ) = (QN + QS)2/2. A Suppose the monopolist can charge different prices in the North and South. What prices maximize its profit?
B Suppose the monopolist can NOT charge different prices in the North and South. Write down the problem that the monopolist solves to maximize profit. C If the monopolist can NOT charge different prices in the North and South, what price maximizes its profit?
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