Suppose that the monopolist can produce with total cost: TC= 10Q. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q₁ = 120-4P₁ and Q2 = 240-2P₂. Suppose that consumers can mail the product from cheaper location to a more expensive location at a certain cost. What would be the critical mailing cost above which consumers do not have such an incentive? a) 50 b) 35 c) 45 d) 55

Suppose that the monopolist can produce with total cost: TC= 10Q. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q₁ = 120-4P₁ and Q2 = 240-2P₂. Suppose that consumers can mail the product from cheaper location to a more expensive location at a certain cost. What would be the critical mailing cost above which consumers do not have such an incentive? a) 50 b) 35 c) 45 d) 55

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Monopoly

Section: Chapter Questions

Problem 3QP

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