Suppose a monopolist faces two groups of consumers. Group 1 has a demand given by P1=50-2Q1 and
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Question:
Suppose a monopolist faces two groups of consumers. Group 1 has a demand given by P1=50-2Q1 and MR1=50-4Q1. Group 2 has a demand given by P2=40-Q2 and MR2=40-2Q2. The monopolist faces MC=AVC=ATC=$10 regardless of which group he supplies to. What is the profit-maximizing quantity for Group 2?
a. 15
b. 10
c. 12
d. 18
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