Microeconomics 18th Edition by Campbell McConnell, Stanley Brue, Sean Flynn

Exercise 11

Suppose that a price discriminating monopolist has segregated its market into two groups of buyers, the first group described by the demand and revenue data that you developed for question 5. The demand and revenue data for the second group of buyers is shown in the accompanying table. Assume that MC is $13 in both markets and MC = ATC at all output levels. What price will the firm charge in each market Based solely on these two prices, what can you conclude about the relative elasticities of demand in the two markets What will be this monopolist's total economic profit