Question 5A monopolist sells in two markets. The demand curve for her product is given by p₁ = 119 – 2x₁ inthe first market and p₂ = 123 - 5x₂ in the second market, where x; is the quantity sold in Market iand Pi is the price charged in Market i. She has a constant marginal cost of production, MC = 3; andno fixed costs. She can charge different prices in the two markets. What is the profit-maximizingcombination of quantities for this monopolist?

Monopoly firm produces where the MR=MC. The monopoly firm charges higher price where the elasticity…

Question 5 A monopolist sells in two markets. The demand curve for her product is given by p₁ = 119 - 2x₁ in the first market and P₂ = 123 - 5x₂ in the second market, where x; is the quantity sold in Market i and p₁ is the price charged in Market i. She has a constant marginal cost of production, MC = 3; and no fixed costs. She can charge different prices in the two markets. What is the profit-maximizing combination of quantities for this monopolist?

Question 5 A monopolist sells in two markets. The demand curve for her product is given by p₁ = 119 - 2x₁ in the first market and P₂ = 123 - 5x₂ in the second market, where x; is the quantity sold in Market i and p₁ is the price charged in Market i. She has a constant marginal cost of production, MC = 3; and no fixed costs. She can charge different prices in the two markets. What is the profit-maximizing combination of quantities for this monopolist?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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