A Monopolist Sells in Two Markets

question 27

Multiple Choice

A monopolist sells in two markets. The demand curve for her product is given by p₁ = 122 - 2x₁ in the first market and p₂ = 306 - 5x₂ in the second market, where x_i is the quantity sold in market i and p_i is the price charged in market i. She has a constant marginal cost of production, c = 6, and no fixed costs. She can charge different prices in the two markets. What is the profit-maximizing combination of quantities for this monopolist?

• A) x₁ = 58 and x₂ = 32.
• B) x₁ = 29 and x₂ = 30.
• C) x₁ = 59 and x₂ = 29.
• D) x₁ = 39 and x₂ = 28.
• E) x₁ = 49 and x₂ = 40.

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Definitions:

Jeffersonian Concept

This concept pertains to the political ideals and visions of Thomas Jefferson, emphasizing democracy, agrarian simplicity, and the rights of states over centralized federal power.

Doctrine of Nullification

A political theory asserting that states have the right to nullify or invalidate any federal law deemed unconstitutional or infringing on states' rights, central to pre-Civil War sectional conflicts.

State Sovereignty

The principle that states have the authority to govern themselves, make their own laws, and manage internal affairs without external interference.

President Jackson

Andrew Jackson, the seventh President of the United States, known for his populist policies and for founding the Democratic Party.