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?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 19SQ
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![A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 –0
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 – qı
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?
Part (d): How many units of output would they sell to group 2 and how much will each consumer in group 2 pay?
Part (e): How much profit is earned by the firm when they practice third-degree price discrimination?
Part (f): How much did profits rise by when the firm switched to using price discrimination?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ba93c91-7813-45a8-9cb2-5329f9066e9b%2Fa392a514-c6ff-4961-8bea-68d6b57156fd%2Fbx1ovzh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 –0
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 – qı
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?
Part (d): How many units of output would they sell to group 2 and how much will each consumer in group 2 pay?
Part (e): How much profit is earned by the firm when they practice third-degree price discrimination?
Part (f): How much did profits rise by when the firm switched to using price discrimination?
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