A monopolist discriminates the price of its product among two groups as follows: Q1 = 100 - p1 (demand of customers in group 1) Q2 = 120 - 0.5p2 (demand of customers in group 2) TC = 2000 + ( Q1 + Q2)2 (total cost of production) a) Find the optimal sales to the first, Q1 * , and to the second, Q2 * , group. b) Find prices to be charged to the first, p1 * , and to the second, p2 * , group. c) Find the profit of this firm.
A monopolist discriminates the price of its product among two groups as follows: Q1 = 100 - p1 (demand of customers in group 1) Q2 = 120 - 0.5p2 (demand of customers in group 2) TC = 2000 + ( Q1 + Q2)2 (total cost of production) a) Find the optimal sales to the first, Q1 * , and to the second, Q2 * , group. b) Find prices to be charged to the first, p1 * , and to the second, p2 * , group. c) Find the profit of this firm.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A monopolist discriminates the
Q1 = 100 - p1 (
Q2 = 120 - 0.5p2 (demand of customers in group 2)
TC = 2000 + ( Q1 + Q2)2 (total cost of production)
a) Find the optimal sales to the first, Q1 * , and to the second, Q2 * , group.
b) Find prices to be charged to the first, p1 * , and to the second, p2 * , group.
c) Find the profit of this firm.
d) Show that the group with more
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