Given a monopolist which has identified two submarkets of buyers for its product with demand schedules: Q1=400-4P, and Q2 300 - 5P2 The total cost curve of the monopolist is C(Q) = 20Q + 100 Q Q1 + Q2 • Determine the profit maximizing outputs and prices in the two submarkets and the total profits of the monopolist under price discrimination. Calculate the price elasticity of demand in each submarket at the profit maximizing output levels. • Determine the profit maximizing output, price and profit if the monopolist does not practice price discrimination.

Given a monopolist which has identified two submarkets of buyers for its product with demand schedules: Q1=400-4P, and Q2 300 - 5P2 The total cost curve of the monopolist is C(Q) = 20Q + 100 Q Q1 + Q2 • Determine the profit maximizing outputs and prices in the two submarkets and the total profits of the monopolist under price discrimination. Calculate the price elasticity of demand in each submarket at the profit maximizing output levels. • Determine the profit maximizing output, price and profit if the monopolist does not practice price discrimination.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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