A Monopolist Faces Two Consumer Groups: Old and Young $P _ { 0 } = 100 - 2 Q _ { 0 }$

Multiple Choice

A monopolist faces two consumer groups: old and young. The inverse demand of old clients for the output of the monopolist is $P _ { 0 } = 100 - 2 Q _ { 0 }$ . The inverse demand of young clients for the output of the monopolist is $P _ { y } = 80 - Q _ { y }$ . The marginal cost of supplying any type of client is $M C = 10$ . If the monopolist can price discriminate between the two groups (i.e., charge a different uniform price to each group) , what price will old and young clients be charged?

A) $P _ { 0 } = \$ 45 ; P _ { y } = \$ 55$
B) $P _ { o } = \$ 55 ; P _ { y } = \$ 45$
C) $P _ { 0 } = \$ 50 ; P _ { y } = \$ 50$
D) $P _ { o } = \$ 40 ; P _ { y } = \$ 60$