4. Consider two markets for the same good: markets 1 and 2. The demand for the good on these markets are: P₁ = 20 2Q₁ and P2 = 40 - 2Q2 The total cost of producing any output Q is c(Q) = 10 + 8Q where Q = 91 +92. (a) Suppose these two markets are completely separated but cach is served by a per- fectly competitive industry. What will be the prices and outputs supplied to cach of the two markets? (a) Now instead of (a), suppose these two markets are served by a single price- discriminating monopolist. If the markets continue to be separated, what are the profit-maximizing prices charged by the monopolist and outputs. Confirm that the market with the less elastic demand is charged the higher price. (c) Now suppose this monopolist is mandated to charge the same price on each market (or that it is now costless for consumers to buy from any of the markets). What will be the profit-maximizing uniform price charged by the monopolist?
4. Consider two markets for the same good: markets 1 and 2. The demand for the good on these markets are: P₁ = 20 2Q₁ and P2 = 40 - 2Q2 The total cost of producing any output Q is c(Q) = 10 + 8Q where Q = 91 +92. (a) Suppose these two markets are completely separated but cach is served by a per- fectly competitive industry. What will be the prices and outputs supplied to cach of the two markets? (a) Now instead of (a), suppose these two markets are served by a single price- discriminating monopolist. If the markets continue to be separated, what are the profit-maximizing prices charged by the monopolist and outputs. Confirm that the market with the less elastic demand is charged the higher price. (c) Now suppose this monopolist is mandated to charge the same price on each market (or that it is now costless for consumers to buy from any of the markets). What will be the profit-maximizing uniform price charged by the monopolist?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 8PA
Related questions
Question
Only part (c) please, thank you!
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning