Question
Now consider a perfectly price-discriminating monopolist facing the same demand curve (p = 10, 0000.25y), and with the same costs (C(y) = 11y) as in
Now consider a perfectly price-discriminating monopolist facing the same demand curve (p = 10, 0000.25y), and with the same costs (C(y) = 11y) as in question 1 above. (a) (4 points) Find the profit-maximizing output of the price-discriminating monopolist. What price/s will this monopolist charge their customers? (b) (4 points) Draw the equilibrium you have derived in part (a). Clearly label the MR and MC curves. Clearly label the profit maximizing output and profit. (c) (2 points) What is the value of the profit made by the price-discriminating monopolist?
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