A monopolist originally charges one price when producing output for consumers with a market demand function P(Q) = 86 – Q. Their total cost function is TC(Q) = 7,500 + 8Q, where MC is constant and equal to $8. Part (a): When the firm behaves as a single-price monopolist, what is the equilibrium market price and market output level? Suddenly, the firm discovers that there are actually two groups of consumers in the market. The first group demands the product according to P(q1) = 98 – 91. while the second group's willingness to pay can be summarized as P(q2) = 62 – 2. where qi + 92 = Q Part (b): How much output is sold to each group and what price is charged to each group of consumers?

A monopolist originally charges one price when producing output for consumers with a market demand function P(Q) = 86 – Q. Their total cost function is TC(Q) = 7,500 + 8Q, where MC is constant and equal to $8. Part (a): When the firm behaves as a single-price monopolist, what is the equilibrium market price and market output level? Suddenly, the firm discovers that there are actually two groups of consumers in the market. The first group demands the product according to P(q1) = 98 – 91. while the second group's willingness to pay can be summarized as P(q2) = 62 – 2. where qi + 92 = Q Part (b): How much output is sold to each group and what price is charged to each group of consumers?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 15SQ

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