The Dumont bus company offers tickets to two different categories of consumers: adult travelers (category A) and child travelers (category B)

QA=100050PA QB=1500100PB where QA and QB represent the number of passengers of each category, PA and PB the price of a ticket.

The cost to serve consumers is:

C(Q)=1000+10Q

o Q=QA+QB

Question 1:

What is the marginal cost in market A? What is the marginal cost in market B?

Question 2:

What are the price and quantity that maximize the profits of the monopolist in market A?

Question 3:

What is the monopolist's profit in market A?

Question 4:

What is the price and quantity that maximizes the profits of the monopolist in market B?

Question 5:

What is the monopolist's profit in market B?

Question 6:

New legislation forces the Dumont bus company to charge a single price to all its customers. What is the total demand? Question 7:

What are the price and quantity that maximize the profits of the monopolist?

Question 8:

What is the profit of the monopolist?

Question 9:

What is the preferred situation for adult travelers (category A)? What is the preferred situation for child travelers (category B)? Explain.