Suppose that a monopolist sells its product in two countries; Japan and Canada.

The monopolist's marginal cost is $44 and total fixed cost is $40.

The direct market demand equations in the two countries are as follows:

QJ = 50 0.5PJ and QC = 2PC; where the subscript J denotes Japan and the subscript C denotes Canada.

3.1 (3 points) Derive a firm's total cost equation. TC = f(Q) = ______________________

3.2 (12 points) Assume that the monopolist can prevent resale from one market to the other (i.e., a product in Japan will not be resold in Canada and vice versa).

a) (4 points) What quantity and price would the firm sell in Japan to maximize profit?

QJ* = _______________ units.

PJ* = $______________

b) (4 points) What quantity and price should the sell in Canada to maximize profit?

QC* = _______________ units.

PC* = $______________

c) (4 points) What is the firm's total profit (*)? * = $______________

3.3 (10 points) Suppose that the monopolist cannot prevent resale, i.e, the monopolist must charge a single price for both countries.

a) (4 points) Derive the direct total market demand equation, QD = f(P).

QD = ___________________

b) (6 points) What would be the profit-maximizing quantity (Q*), price (P*), and profit (*)?

Q* = _______________ units.

P* = $______________

* = $______________