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C-) There are two consumers with different demand curves. Marginal cost is $10. What would be...

C-) There are two consumers with different demand curves. Marginal cost is $10. What would be a possible price to maximise monopoly profit?.

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Answer #2

Profit maximising price is decided where MR= MC and price is decided on demand curve corresponding to the point where MR = MC.
So when there is two demand curves.
The demand curve which is flat the other will have less price because price elasticity of demand of this consumer is less.
And consumer with steep demand curve will face higher price because of inelastic demand curve.
But profit maximising condition remains same for both which is where MR = MC.

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answered by: anonymous
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