suppose a monopoly can produce any level of output it
wishes at a constant marginal and average cost of ksh 5 per
unit.Assume further that the Monopoly sells its goods in two
different markets that are separated by some distance.If The demand
curve for the first and second markets are given by
respectively
Q1=55-p1
Q2=70-P2
a) If the monopolist can maintain the separation between the two
markets, what level of output should be produced in each market and
at what prices
b) What are the total profits in the situation a above
c)How would the above answers change if it only cost buyers ksh 5
to transport goods btn the two markets.
d) What would be the monopolists new profit level in the
situation
e)How would your answer change if transportation costs fell to
zero
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