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28 Sep 2019
A monopolist is deciding how to allocate output between two geographically separated markets
(East Coast and Midwest). Demand and marginal revenue for the two markets are:
P1 = 15 -Q1 ----> MR1 = 15 - 2Q1
P2 = 25 - 2Q2 ----> MR2 = 25 - 4Q2
The monopolists total cost is C = 5 - 3(Q1 - Q2 ). What are price, output, prots, marginal
revenues, and deadweight loss if
(a) the monopolist can price discriminate?
(b) if the law prohibits charging dierent prices in the two regions?
A monopolist is deciding how to allocate output between two geographically separated markets
(East Coast and Midwest). Demand and marginal revenue for the two markets are:
P1 = 15 -Q1 ----> MR1 = 15 - 2Q1
P2 = 25 - 2Q2 ----> MR2 = 25 - 4Q2
The monopolists total cost is C = 5 - 3(Q1 - Q2 ). What are price, output, prots, marginal
revenues, and deadweight loss if
(a) the monopolist can price discriminate?
(b) if the law prohibits charging dierent prices in the two regions?
Darryn D'SouzaLv10
29 Sep 2019
