A Monopolist Operates in Two Markets Whose Demand Functions Are

question 72

Essay

A monopolist operates in two markets whose demand functions are p₁ = 120 - q₁ and p₂ =100 - 0.5q₂. The monopolist has a constant marginal cost of $20.
a)Find the prices and market quantities when the monopolist can price discriminate between the two markets.
b)Find the output in each market if price discrimination is impossible.
c)Show that the total output q₁ + q₂ is the same in part a. and b.

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Definitions:

Equivalent

Having equal value, function, meaning, etc., especially in a mathematical, logical, or computational context.

Leah

Typically a female given name, possibly originating from Hebrew, meaning "weary" but also associated with grace or meadow.

Equivalent

Possessing identical worth, purpose, or significance.

Predicates

Components of sentences that express what is being said about the subject, typically containing a verb and providing information about the subject's action or state.