A monopolist sells the same good in two geographically separated markets, market 1 and market 2. The firm maximizes its profit by charging different prices: p₁ = 37 in market 1 and på in market two. The own-price elasticity of the demand in market 1 is -27 and the own-price elasticity of the demand in market 2 is -13. Find the price the firm charges in market 2, P2, and enter it below. (Hint: Write down the inverse elasticity rule for each market. What "element" common to both expressions?)

A monopolist sells the same good in two geographically separated markets, market 1 and market 2. The firm maximizes its profit by charging different prices: p₁ = 37 in market 1 and på in market two. The own-price elasticity of the demand in market 1 is -27 and the own-price elasticity of the demand in market 2 is -13. Find the price the firm charges in market 2, P2, and enter it below. (Hint: Write down the inverse elasticity rule for each market. What "element" common to both expressions?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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