A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 – and total cost curve equal to TC (q) = 10, 500 + 32Q, with constant MC equal to MC(Q) = 32 for all units produced. Part (a): How much output does the firm produce and at what price is each unit sold for? Part (b): Calculate the firm's profit. The firm now realizes there are actually two distinct groups of consumers that purchase their product, with the following demand functions: P(q1) = 242 – q1 P(q2) = 176 – 92 Their total and marginal cost curves have not changed. If the firm wanted to successfully practice third-degree price discrimination: Part (c): How many units of output would they sell to group 1 and how much will each consumer in group 1 pay?

A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 – and total cost curve equal to TC (q) = 10, 500 + 32Q, with constant MC equal to MC(Q) = 32 for all units produced. Part (a): How much output does the firm produce and at what price is each unit sold for? Part (b): Calculate the firm's profit. The firm now realizes there are actually two distinct groups of consumers that purchase their product, with the following demand functions: P(q1) = 242 – q1 P(q2) = 176 – 92 Their total and marginal cost curves have not changed. If the firm wanted to successfully practice third-degree price discrimination: Part (c): How many units of output would they sell to group 1 and how much will each consumer in group 1 pay?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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