Assume Ghacem Limited (Ghacem) continues to enjoy monopoly power over the production and sale of cement products in Ghana and operates with marginal costs of Ghs10 and sells to two sets ofconsumers. It is estimated that each set ofconsumers is made up of20 buyers. The individual demand function for the first set of consumers (A) is given by: QA(P) = 20 - P; and for the second set of consumers (B) it's given as: QB(P) = 16 P; Using the above information estimate market output(s), price(s) and profits for both set of consumers under the following condition(s): 1. If Ghacem cannot prevent arbitrage ii. If Ghacem is able to prevent arbitrage but has no knowledge about the type of consumers it is dealing with. iii. If Ghacem is capable of preventing arbitrage between the different set ofconsumers but not within consumers in the same group. iv. If Ghacem can now identify all its consumers and can prevent arbitrage both between and within groups of consumers.

Assume Ghacem Limited (Ghacem) continues to enjoy monopoly power over the production and sale of cement products in Ghana and operates with marginal costs of Ghs10 and sells to two sets ofconsumers. It is estimated that each set ofconsumers is made up of20 buyers. The individual demand function for the first set of consumers (A) is given by: QA(P) = 20 - P; and for the second set of consumers (B) it's given as: QB(P) = 16 P; Using the above information estimate market output(s), price(s) and profits for both set of consumers under the following condition(s): 1. If Ghacem cannot prevent arbitrage ii. If Ghacem is able to prevent arbitrage but has no knowledge about the type of consumers it is dealing with. iii. If Ghacem is capable of preventing arbitrage between the different set ofconsumers but not within consumers in the same group. iv. If Ghacem can now identify all its consumers and can prevent arbitrage both between and within groups of consumers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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