Suppose that Intel has a monopoly in the market for computer chips. In order to produce X computer chips, it costs Intel C(X) = 2X2. (i) Find the marginal cost of producing a computer chip for Intel. ii) The demand for computer chips is X =12 − 0.25P. Find the level of output that maximizes Intel’s profits. What price is Intel charging

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Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.