Assume that the total demand is Q = 50 – 0.5P (or P = 100 – 2Q)\\nAssume further that the demand function of segmented markets are given as follows:\\n?1 = 32 – 0.4?1\\n?2 = 18 – 0.1?2\\nNote: Q = ?1 + ?2\\nAssume that the cost function is C = 50 + 40Q\\n(a) Find out the profit maximizing levels of output (?1 and ?2).\\n(b) What are the corresponding prices?\\n(c) What is the total profit of this price discriminating Monopolist?\\n(d) What are the price elasticities of demand in these two markets?\\n(e) Based on the price elasticities, which market will charge a higher price and why?\\n(f) Compare the profit of this price discriminating Monopolist with the profit of the simple Monopolist. Interpret your results
Assume that the total
Step by step
Solved in 4 steps with 5 images
