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Suppose a monopoly can produce any level of output it wishes at a constant marginal (and average) cost of $5 per unit. Assume the monopoly
Suppose a monopoly can produce any level of output it wishes at a constant marginal (and average) cost of $5 per unit. Assume the monopoly sells its goods in two different markets separated by some distance. The demand curve in the first market is given by
Q1 = 55 - P1
and the demand curve in the second market is given by
Q2 = 70 - 2P2
If the monopolist can maintain the separation between the two markets, what would be the firms total profits?
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