2. Say a monopolist sells in two separate markets, with demand PA = 30 - 2Q (that is, the MRA = 30 – 4Q) and PB = 40 - Q (that is, the MRB = 40 – 2Q), respectively. Marginal costs in both markets are constant and equal to 10. What are the prices and quantities that the monopolist would charge in each market to maximize profit. (4 pts) Show your work.
3. A monopolist has marginal costs MC = Q and home market demand P = 40 – Q (that is the MR = 40 – 2Q). The monopolist can also sell to a foreign market at a constant price P = 16. Find and graph the quantity produced, quantity sold in the home market, quantity sold in the foreign market, and price charged in the home market. Explain why the monopolist’s profits would fall if it were to produce the same quantity but sell more in the home market.
Please help with these two questions!! Show work and label everything! THANK YOU :)
Get Answers For Free
Most questions answered within 1 hours.