Question
Suppose that the demand curves for a product produced by a monopoly firm in two markets are given by: Y 1 = 12 - P
Suppose that the demand curves for a product produced by a monopoly firm in two markets are given by: Y1 = 12 - P1 and Y2 = 12 - 2P2. The firm's cost function is given by C (Y) = (12/2)*Y. What will be the prices, quantities produced and consumer surpluses in both markets and the monopolist's profit in the following situations:
1) The monopolist has to charge the same price in both markets
2) The monopolist can charge different prices in each market (but cannot discriminate prices in each market)
3) The monopolist charges a flat fee in two parts.
4) The monopolist can discriminate price in each market.
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