show all working. 7. Suppose you are employed at a monopolistic company as a research (pricing) economist and you arederiving the behavior of two markets based on demand curves given by:D1(p1) = 50 – P1D2(p2) = 50 – 2p2Assume that the marginal cost is constant at $8 a unit.(a) If it can price discriminate, what price should it charge in each market in order to maximizeprofits?(b) If it can't price discriminate, what price should it charge?

7. Suppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by: D1(p1) = 50 – p1 D2(p2) = 50 – 2p2 %3D Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can't price discriminate, what price should it charge?

7. Suppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by: D1(p1) = 50 – p1 D2(p2) = 50 – 2p2 %3D Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can't price discriminate, what price should it charge?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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