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Please calculate the correct answers and briefly explain your steps Q3 (4 points) A firm is originally operating as a single-price monopolist that faces a
Please calculate the correct answers and briefly explain your steps
Q3 (4 points) A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 - 2Q and total cost curve equal to TO (9) = 10,500 + 32@, with constant MC equal to MC(Q) = 32 for all units produced. Part (a): How much output does the firm produce and at what price is each unit sold for? Part (b): Calculate the firm's profit. The firm now realizes there are actually two distinct groups of consumers that purchase their product, with the following demand functions: P (gi ) = 242 - 91 F (92 ) = 176 - -42 Their total and marginal cost curves have not changed. If the firm wanted to successfully practice third-degree price discrimination: Part (c): How many units of output would they sell to group 1 and how much will each consumer in group 1 pay? Part (d): How many units of output would they sell to group 2 and how much will each consumer in group 2 pay? Part (e): How much profit is earned by the firm when they practice third-degree price discrimination? Part (f): How much did profits rise by when the firm switched to using price discriminationStep by Step Solution
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