The following shows the demands and marginal revenue in two markets (D1 and MR1, and D2 and MR2) for a price discriminating firm along with total demand, DT, marginal revenue, MRT, and marginal cost MC.

As with the PPT slides, you can view the data generating these lines; for reference,

D1 = 200 - 0.25Q

D2 = 300 - 0.25Q

MRT = 250 - 0.25Q

DT = 250 - 0.125Q

MC = 0.0008Q^2 - 0.45Q + 150

a.Compare the demand conditions in each market; i.e. how do the two markets differ in their demand for the firm's product?

b.How much total output should the firm produce (for both markets combined)? How should that output be allocated between markets 1 and 2?

c.What price should the firm charge in each market?

1. The following shows the demands and marginal revenue in two markets (D1 and MR1, and D2 and MR2) for a price discriminating firm along with total demand, DT, marginal revenue, MRT, and marginal cost MC. 350 325 300 D2 275 MR2 250 225 MC 200 175 - .. D1 DT MR1 150 125 MRT 100 . ..... 75 .. . ...................... 50 25 0 100 200 300 400 500 600 700 800 - . . D1 - - - MR1 . - D2 - MR2 ........ MRT DT - MC As with the PPT slides, you can view the data generating these lines; for reference, D1 = 200 - 0.25Q D2 = 300 - 0.25Q MRT = 250 - 0.25Q DT = 250 - 0.125Q MC = 0.0008Q 2 - 0.45Q + 150 a. Compare the demand conditions in each market; i.e. how do the two markets differ in their demand for the firm's product? b. How much total output should the firm produce (for both markets combined)? How should that output be allocated between markets 1 and 2? c. What price should the firm charge in each market