Question

**(3rd Degree Price Discrimination)** Consider a
monopolist serving two identifiably distinct markets with no resale
possible, so that the monopolist may practice third-degree price
dis- crimination. Demand in market 1 is given by
*D*_{1}(*p*_{1}) = 800 *−*
8*p*_{1} and demand in market 2 is given by
*D*_{2}(*p*_{2}) = 1200 *−*
12*p*_{2}. Marginal cost is constant, *M C* =
10, and there is no fixed cost.

**A)** Find the marginal revenue curve in each
market, *M R*_{1}(*q*_{1}) and *M
R*_{2}(*q*_{2}).

**B)** Find the values of price charged and
quantity sold by the monop- olist in each market. Be sure to list
all of them: *p*_{1}, *q*_{1},
*p*_{2}, and *q*_{2}.

**C)** Now suppose resale becomes possible, so that
the monopolist can no longer price discriminate. What (uniform)
price, *p** ^{m}*, does it charge? What is the

**D)** How much more profit does the monopolist
receive while price discriminating than when it sets a uniform
price?

Answer #1

Thanks!

1. Consider a monopolist with unit cost c = 20, facing
two separate markets with demand functions D1(p1) = 100 - p1 and
D2(p2) = 60 - 2p2.
(a) Find the optimal prices (p1*, p2*) and quantities (q1*, q2*)
with price discrimination.
(b) Find the optimal price p* and quantity q* without price
discrimination. Compare them to the answers in (a)
(c) Compare total welfare with and without price discrimination.
Explain your answer.

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)...

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...

Question #4
(3rd Degree Price Discrimination)
A Monopolist selling a cell phone in two separate markets. They
must decide how much to sell in each market in order to maximize
their total profits.
The demand in the Brazilian Market is
:
QBrazil = 200 – 10PBrazil
The demand in the United States Market
is:
QUSA = 60 – 20PUSA
If Total Cost is: TC = 90 + 2(QUSA
+QBrazil)
Calculate the Price and Quantity if the Monopolist Maximized...

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 is able to practice price discrimination in
two separate markets. Each market has a different demand curve for
the monopolist’s product:
Q1 = 1000 – 4P (Market 1: Maine)
Q2 = 1200 – 4P (Market 2: Texas)
Let the short-run total cost function for the monopolist be SRTC
= 100 + 0.25Q2
a. Find the quantity and price at which the monopolist will sell
in each market, and figure out the firm’s total profits from the
combined...

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...

Suppose that the monopolist gas producer UPEC operates in two
distinct markets and charges customers in each market a different
price (i.e., practicing third-degree price discrimination). In
addition, suppose that in producing gas, UPEC incurs a fixed cost
of $10 and a variable cost of 2Q. The (separate) demand functions
are given by:
Demand for gas among Group 1: P1 = 24 – Q1
Demand for gas among Group 2: P2 = 10 – 0.5Q2
A. Find the...

Consider a monopolist facing two types of consumers. Normalise
the total population to 1. Type one consumers are in proportion
1/2, and type two are in proportion 1/2. The monopolist has
marginal cost of production c = 1/2. The two types have demand
curves
q₁ =1-p
q₂ =1-(p/2).
If the monopolist can identify the two types and can charge
different two-part tariffs to different types: {A1, p1} and {A2,
p2}. [All type one consumers are identical and have the q1...

Consider a monopolist selling sweets to two types of consumers
(assume sweets are
infinitely divisible, so that the monopolist can sell any
nonnegative, real quantity).
The demand function of consumers of type 1’s is
p1(q1)
= 9 − 3q1.
The demand function of consumers of type 2’s is
p2(q2)
= 8 − 5q2.
The monopolist can produce sweets at no
cost.
There are equal numbers of both types of consumers.
SOLVE by using calculus please
SHOW STEP-BY-STEP solution please
(a)...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 10 minutes ago

asked 10 minutes ago

asked 32 minutes ago

asked 42 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago