Assume a monopoly has two groups of customers, and each group of customers has different demand for the firm's product. Group A's demand is: Pa = 90 - .1qa where qa is group A's quantity demanded and Pa is the commodity's price in dollars for group A customers. Group B's demand is: Pb = 170 - .2qb where qb is group B's quantity demanded and Pb is the commodity's price in dollars for group B customers. The firm's total cost curve is: TC = 30,000 + .05q2 where TC is the firm's total cost in dollars and q is the total quantity of output produced by the firm. Based upon the above equations, answer the following questions: a. What quantity of the commodity would the firm sell to customers in group B? What price would the firm establish for customers in group B? b. What quantity of the commodity would the firm sell to customers in group A? What price would the firm establish for customers in group A?
Assume a
Pa = 90 - .1qa
where qa is group A's quantity demanded and Pa is the commodity's
Pb = 170 - .2qb
where qb is group B's quantity demanded and Pb is the commodity's price in dollars for group B customers. The firm's total cost curve is:
TC = 30,000 + .05q2
where TC is the firm's total cost in dollars and q is the total quantity of output produced by the firm. Based upon the above equations, answer the following questions:
a. What quantity of the commodity would the firm sell to customers in group B? What price would the firm establish for customers in group B?
b. What quantity of the commodity would the firm sell to customers in group A? What price would the firm establish for customers in group A?
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