Question

A monopolist selling a product in two separate markets must decide how much to sell in each market to maximize profits. Assuming the elasticities of demand differ across the markets and that there is no possibility for resale across the markets, graphically show the profit maximizing level of output assuming the monopolist is able to price discriminate. Show the output that is sold and the price charged in each of the markets. Show the price and output levels in each market if the monopolist is unable to price discriminate.

Answer #1

A firm is selling its product in two markets. In market A the
demand is given by QA = 100 − 2P and in market B the demand is QB =
80 − 4P. The firm’s total cost is C = 10Q where Q = QA + QB is the
total output. a) Suppose the monopolist cannot discriminate between
markets A and B. What is the total demand ? (1 pt) Find the
profit-maximizing price and quantity (2 pt), and...

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...

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...

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 =...

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.

(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
D1(p1) = 800 −
8p1 and demand in market 2 is given by
D2(p2) = 1200 −
12p2. Marginal cost is constant, M C =
10, and there is no fixed cost.
A) Find the marginal revenue curve in each
market, M R1(q1) and M
R2(q2).
B)...

Suppose a monopolist practices price discrimination in selling
his product, charging different prices in two separate markets. In
the market A the demand function is PA =
100-qA and in B it is PB = 84-qB,
where qA and qB are the quantities sold per
week of A and B, PA and PB are the
respective prices per unit . If the cost function of the monopolist
is c = 600 + 4 (qA + qB)
A.How much should be sold...

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...

(1 point) A monopolist sells its product to US and Asia. Suppose
it can separate the market. Suppose it produces the product in 2
factories: Factory #1 and #2. Write down the profit maximizing
condition. (no need to proof it.)
(7 points) Suppose the price at which a monopolist can sell its
product is P = 1400 - Q , where Q is the number of units sold per
period. The monopolist's cost function is C(Q) =
3Q^2
a) Suppose...

Your firm wants to sell its product in each of several foreign
countries, and you must decide whether to do so by exporting or by
producing locally for that market through FDI. Suppose that in each
country the demand for the product is the same, and is given by: P=
15 – Q, where Pis the price your firm charges in that country in
dollars and Qis the quantity sold there. In addition, the marginal
cost of production in any...

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