2 Suppose a discriminating monopolist is selling a product in four separate markets in whichdemand functions are:Q, = 300 – Pi; Q. = 200 – 0.5 P.; Q = 150 – 0.4P, and Q. = 75 – 0.25P.Cost function is TC = 61,000 – 100Q.a.As an economic adviser, determine the Prices to be charged in the three marketsand amount of output to be sold in each market so that total profits can bemaximized.b.Calculate the total profit to be made from the strategy of price discrimination andclearly explain how this strategy has aided this monopolist.

(a) Marginal cost (MC) is calculated by differentiating total cost (TC) with respect to quantity…

2 Suppose a discriminating monopolist is selling a product in four separate markets in which demand functions are: Q= 300 - P; Q. = 200 – 0.5 P:; Q, = 150 – 0.4P, and Q. = 75 – 0.25P. Cost function is TC = 61,000 – 100Q. a. and amount of output to be sold in each market so that total profits can be maximized. As an economic adviser, determine the Prices to be charged in the three markets Calculate the total profit to be made from the strategy of price discrimination and clearly explain how this strategy has aided this monopolist.

2 Suppose a discriminating monopolist is selling a product in four separate markets in which demand functions are: Q= 300 - P; Q. = 200 – 0.5 P:; Q, = 150 – 0.4P, and Q. = 75 – 0.25P. Cost function is TC = 61,000 – 100Q. a. and amount of output to be sold in each market so that total profits can be maximized. As an economic adviser, determine the Prices to be charged in the three markets Calculate the total profit to be made from the strategy of price discrimination and clearly explain how this strategy has aided this monopolist.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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