Consider a monopolistic firm selling the same product in two completely separate markets (market 1 and market 2) with the following demand schedules (BTW: assume that the numbers given are based continuous linear demand curves in each market): Quantity (Q1) 0 1 2 3 4 5 6 7 8 Price (P1) 24 21 18 15 12 9 6 3 0 Quantity (Q2) 0 1 2 3 4 5 6 7 8 Price (P2) 40 35 30 25 20 15 10 5 0 The marginal cost of this firm is equal to its average total cost and is constant at $15 per unit produced (note that this also means that there are no fixed costs). Based on this information use excel to calculate marginal revenues and set up diagrams that show the demand and the marginal revenue curves of this firm in each market, as well as the quantities and prices it should charge in these markets in order to maximize overall profits. (BTW: As you set up your diagrams, remember that marginal values should be placed in the middle of the range over which the marginal value is calculated).
Consider a monopolistic firm selling the same product in two completely separate markets (market 1 and market 2) with the following
| Quantity (Q1) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 24 | 21 | 18 | 15 | 12 | 9 | 6 | 3 | 0 | |
| Quantity (Q2) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Price (P2) | 40 | 35 | 30 | 25 | 20 | 15 | 10 | 5 | 0 |
The marginal cost of this firm is equal to its
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