Essay
A monopolist operates in two markets whose demand functions are p1 = 120 - q1 and p2 =100 - 0.5q2. The monopolist has a constant marginal cost of $20.
a)Find the prices and market quantities when the monopolist can price discriminate between the two markets.
b)Find the output in each market if price discrimination is impossible.
c)Show that the total output q1 + q2 is the same in part a. and b.
Correct Answer:
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a. q1 = 50, q2 = 80, p1 = ...View Answer
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