Two monopolists in different markets have identical, constant marginal cost functions.
a) Suppose each faces a linear demand curve and the two curves are parallel. Which monopolist will have the higher markup (ratio of P to MC): the one whose demand curve is closer to the origin or the one whose demand curve is farther from the origin?
b) Suppose their linear demand curves have identical vertical intercepts but different slopes. Which monopolist will have a higher markup: the one with the flatter demand curve or the one with the steeper demand curve?
c) Suppose their linear demand curves have identical horizontal intercepts but different slopes. Which monopolist will have a higher markup: the one with the flatter demand curve or the one with the steeper demand curve?