Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please solve this problem in the EASIEST way possible. The answer to part A should be q1*=249 & q2*= 396 & p1*= 251 & p2*=

Please solve this problem in the EASIEST way possible. The answer to part A should be q1*=249 & q2*= 396 & p1*= 251 & p2*= 101 The answer to part B should be 131 The answer to part C should be $18,000

image text in transcribed
Problem 1 Suppose a monopolist faces two markets with the following demand curves: Market 1: D, (p1) = 500 - P1 Market 2: D2 (P2) - 800 - 4p2 Let the marginal cost be $2 per unit in both markets. A) If the monopolist can price discriminate, what should be the prices p, and P2 and the production levels q, and q2 to maximize the monopolist's profit? B) What is the profit-maximizing price and quantity if the monopolist cannot price discriminate and instead charges the same price in each market? C) How much profit does the monopolist lose from not being able to price discriminate relative to the profit the monopolist would earn from being able to price discriminate

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Marketing

Authors: Philip R Cateora, John Graham, Mary Gilly

18th Edition

1260547876, 9781260547870

More Books

Students also viewed these Economics questions