Question

A monopolistic pharmaceutical company sells a pill in two countries, and resales between the countries are...

A monopolistic pharmaceutical company sells a pill in two countries, and resales between the countries are impossible. The demand curves in the two countries are: P1 = 100− Q1 and P2 = 120−2Q2. The monopolist’s marginal cost is $30. Solve for the equilibrium price in each country. What is the equilibrium price and quantity if the monopolist decides to treat the two markets as one big market and charge a unique price? Compare the profits in these two situations.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A monopoly sells in two​ countries, and resales between the countries are impossible. The demand curves...
A monopoly sells in two​ countries, and resales between the countries are impossible. The demand curves in the two countries are p 1 equals 100 minus Upper Q 1p1=100−Q1​, and p 2 equals 120 minus 2 Upper Q 2p2=120−2Q2. The​ monopoly's marginal cost is m​ = ​$3535. Solve for the equilibrium price in each country. The equilibrium​ price, p1​, is ​$nothing. ​ (Round your answer to the nearest​ penny.) The equilibrium​ price, p2​, is ​$nothing. ​ (Round your answer to...
1. A monopolist producer of a sailboat motor sells output in two geographically separated markets (East...
1. A monopolist producer of a sailboat motor sells output in two geographically separated markets (East and West Coasts).  Inverse demand and marginal revenue for the two markets are:  P1 = 2000 - Q1 and MR1 = 2000 - 2Q1 and P2 = 3000 - 2Q2 and MR2 = 3000 - 4Q2.  The monopolist’s total cost is C = 500,000 + 1000(Q1 + Q2). What are price, output, profits, marginal revenues, and deadweight loss for the following two cases:  (a)...
28. A monopolist faces two separate demand curves in two separate markets: P1 = 78 -...
28. A monopolist faces two separate demand curves in two separate markets: P1 = 78 - 3Ql and P2 = 86 - 2Q2. The total cost curve is TC = 6 + 6Q. Find Q1, Q2, P1, P2, the price elasticities at the two profit maximizing points, and the Lerner Index at the two profit maximizing points.
(a) A pharmaceutical company sells its patented drug in two different countries. Trad- ing of pharmaceuticals...
(a) A pharmaceutical company sells its patented drug in two different countries. Trad- ing of pharmaceuticals across the two countries is not allowed. If the demand elasticity in both countries is the same, how would the pharmaceutical company go about deciding what price to charge in each country? (b) Ifallconsumersofaproducthaveidenticaltastes,whatpricingstrategymaximizes the firm’s profits and requires the least amount of information about demand? Explain. (c) Explain why a firm can earn more profit by price discrimination than from setting a uniform...
I have question about answer ? please see every ***** I noted below: question :A monopolist...
I have question about answer ? please see every ***** I noted below: question :A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and West Coast). Demand for thetwo markets are: P1 = 10 – 0.25Q1 and P2 = 15 – Q2 The corresponding aggregate demand curve is given as P = 11 – 0.2Q, where Q =Q1+Q2. The monopolist’s marginal cost is fixed at $5 and there are no fixed costs. What are...
A monopolist sells in two markets that have demand functions given by D1 (p1) = 100...
A monopolist sells in two markets that have demand functions given by D1 (p1) = 100 - p1 and D2 (p2) = 100 - (1/2) p2: The marginal cost of production is constant at c = 20. (a) Assume the Örm charges di§erent prices to each group. What will be the equilibrium quantities in markets 1 and 2? (b) What market pays a higher price? Why?
Assume a monopolist can produce at constant average and marginal costs of AC=MC=5, and sells its...
Assume a monopolist can produce at constant average and marginal costs of AC=MC=5, and sells its goods in two different markets separated by some distance. The demand in the first market is given by Q1= 55 - P1 and the demand in the second market is given by Q2 = 70 - 2P (a) If the monopolist can maintain the separation between the two markets, what level of output should be produced in each market, and what’s the price charged...
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve...
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve (1 pt) Q = 400 – 4P with constant MC = 40 Hint: Remember we use “inverse” demand curve where P(Q) to use the twice as steeply sloped rule. b) Now write out the 3 conditions necessary for a monopolist to be able to price discriminate. (1 pt) c) Consider a monopolist who can use 3rd degree price discrimination by separating the above demand...
A monopolist sells in two markets. The demand curve for her product is given by p1...
A monopolist sells in two markets. The demand curve for her product is given by p1 = 120 y1 in the Örst market; and p2 = 105 y2 2 in the second market, where yi is the quantity sold in market i and pi is the price charged in market i. She has a constant marginal cost of production, c = 10, and no Öxed costs. She can charge di§erent prices in the two markets. 1) Suppose the monopolist charges...
Consider two firms are performing Cournot price competition in two differentiated goods markets. Firm 1 produces...
Consider two firms are performing Cournot price competition in two differentiated goods markets. Firm 1 produces goods 1, and firm 2 produces goods 2, and two market demand functions are given by q1(p1,p2) = 12 - 2p1 +p2 and q2(p1,p2) = 15q22 + 45Q . Furthermore, assume that the two firms have the same cost function such that fixed cost is $20 and variable cost is zero. (10pts) Calculate the equilibrium prices, quantities and profits for both firms. (10pts) Assume...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT