sAssume that a monopolist is able to engage in perfect price discrimination and sell each unit ofthe product at a price equal to the maximum price the buyer of that unit of the product would bewilling to pay. Complete the table below by computing total revenue and marginal revenue for theprice discriminating monopolist.Quantity Price Total revenue Marginal revenue Total Cost Marginal cost0$34$132302826242220181614234SSN5678910$$2036465054566480100128160$(a) What is the marginal revenue that the discriminating monopost obtains from the sale of eachadditional unit?(b) How many units would be produced and what would be the total revenue for the perfectlydiscriminating monopolist? What would economic profits be?(c) Compare the economic effects of price discrimination to no price discrimination for the puremonopolist in terms of profits and the level of output.

A price-discriminating monopolist is a single seller that charges different prices for the same…

age the product at a price equal to the maximum price the buyer of that unit of the product would be willing to pay. Complete the table below by computing total revenue and marginal revenue for the price discriminating monopolist. Quantity Price Total revenue Marginal revenue Total Cost Marginal cost 0 $34 $ 1 32 30 28 26 24 22 20 2345 6 7 $ LA $20 36 46 50 54 56 64 80 555 ta

age the product at a price equal to the maximum price the buyer of that unit of the product would be willing to pay. Complete the table below by computing total revenue and marginal revenue for the price discriminating monopolist. Quantity Price Total revenue Marginal revenue Total Cost Marginal cost 0 $34 $ 1 32 30 28 26 24 22 20 2345 6 7 $ LA $20 36 46 50 54 56 64 80 555 ta

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1’s elasticity of demand is −6, while group 2’s is −2. Your marginal cost of producing the product is $80. a. Determine your optimal markups and prices under third-degree price discrimination. markup for group 1: price for group 1: markup for group 2: price for group 2:
Total Marginal Revenue Average Total Cost Marginal Output Price Cost $100 $100 $100.00 $30 06 80 63.00 26 80 60 52.67 32 70 40 49.50 40 60 20 49.60 50 50 50.00 52 40 30 -20 52.29 66 8. -40 55.75 80 9. 20 -60 60.67 100 10 10 -80 67.60 130 Refer to the table above for a pure monopolist. The profit-maximizing price for this monopolist is: O$ 60 $90 $70 $80 Next Page 12345
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